Oprah Karaoke Challenge...

[ddouglass]

I really debated on wading into this but to clarify I will.
"You are allowed to record yourself for your own use, you are entitled to one copy of that recording, not to be given away or sold thats how it reads black & white." This does not say you can have them use your music to record themselves. Thus they would have to supply you with the music and then record it themselves.
As far as the contest goes I am sure there is a disclaimer that protects them from illegal recordings sent to them. As you say her high-priced lawyers would have made sure that they would not be responsible.