If you look at the Kung Fu Live dev interview:
http://www.youtube.com/watch?v=jJR_QzWGhGo&feature=player_embedded
You can see the dev hints that the PSEye cannot track 2 people at the same time. I don't know how they could've done Singstar Dance better if they were only gonna fully track one person. If they release the wireless mics around the same time as Singstar Dance, I'm getting it. Thanks for embedding the vids.