Well, in my opinion.. despite there being a "Karaoke Contest", Karaoke should NOT be a talent show. It shouldn't matter who has the best voice, who can hit the highest note, or who sounds the most like the original singer. I have no idea how karaoke actually is in Japan, but look at how they protray it in anime and manga. It's always a group of classmates or friends together to have a good time, some may be excellent, while others could probably raise the dead with their voice *lol* .. look at Yomi in Azumanga Daioh ^_-
So, don't worry about what your voice sounds like! This isn't American Idol, or even NDK idol! Karaoke shouldn't be about who has the best voice, it should be about getting up their and having fun!