I ALWAYS sing on Xbox Live. It's part of my trash-talking game. And I have an encyclopedic memory, so I'll just sing some song to go with their name,or I'll make up words to a song's tune.
I do this almost every day with my brother in real life. I make up songs with horrible lyrics to constantly rip on him.
Also, when Stepbrothers came out on DVD, then when it came out on Satellite, I would always, always sing either "boats and hos" or that "something to talk about" song that Will Ferrel sings acapella. That usually drives people nuts and messes up their game. But then, there's always the mute button.
I also love that in Halo, when you kill someone, they can hear what you say, and I'd usually be singing. hehehehe