Robot man! You... sound... so... REAL!
Listen to a sample of this new vocalizing software.
This is a version of the Loituma song sung by the computer program:
"The singer is 'Hatsune Miku' (初音ミク) from Crypton’s VOCALOID2 software. It’s basically a music creation tool similar to MIDI composers except that instead of synthesizing instruments, it synthesizes vocals. That said, it doesn’t actually generate the voice using any magical algorithm; the vocals are actually pre-recorded (the voice belongs to Saki Fujita, an obscure seiyuu with few titles under her name)."
I couldn't have described it any better. He also notes that the Japanese language has only about fifty or so different enunciations, so it's like programing the different notes a piano can make and designing the software to be able to play it back as music, but in this case it's vocals and singing.
Here's another example and a visual of how the program works.
Watch the VOCALID2 software compose a version of Hare Hare Yuaki.