Pick a song your audience will know and want to participate with. If you pick something fast or upbeat, make sure it's one you would want to clap along with or dance to if you heard it. Slow songs or ballads should make the audience sing along with you or better yet, have them out on the dance floor with a partner.
Practice, practice, practice! Learn all the words. Forgetting the words to a song not only looks bad on you, it can make you forget where you left off and throw your whole song off. (If you don't believe me, just watch American Idol auditions!) If it's a karaoke contest and you'll be able to read the words from the karaoke machine, it's ok to glance at them while you're singing. Even though it IS a karaoke contest, sometimes points can be deducted for just standing there staring at the tv screen.
Once you're comfortable singing your song without looking at the words, practice your movements. Know how you'll move across the stage or dance floor while you're singing. Be sure to hold the microphone at the correct distance from your mouth. If it's too close, you may sound loud or muffled. Too far away and your audience might not hear you at all!
Know the rules of the contest. Many times contestants are given written rules to follow. Be sure you read and understand them. You don't want to lose the contest because you sang country on rock-n-roll night or spent hours practicing from your own karaoke cd only to find out that you can only use the karaoke dj's cds during the contest.
Understand that all karaoke cd's are not the same. They can have different musical arrangements, be sung in different keys, and even have different words. So if you have been practicing from a Chartbuster Karaoke cd or a Sweet Georgia Brown Karaoke cd, don't expect the same song on a Party Tyme Karaoke cd or All Star Karaoke cd to sound the same. If you have been practicing with one brand of karaoke cd's, make sure you use the same brand during the contest.
Organize your contest outfit in advance. Get your entire outfit together including shoes, accessories and props (if props are allowed during the contest). You don't want to be scrambling an hour before the contest trying to decide what to wear. Make sure you're outfit is appropriate to your song and won't interfere while you are performing.