
MIDI is a way of connecting musical instruments to computers, and to each other, such that the instruments send things like notes, velocity, and pitch to each other, not just sound. For more detailed info, check out the wikipedia entry on MIDI.
It’s been around for ages. MIDI files don’t contain sounds, they just contain notes (like sheet music) and instructions about what instruments go with what notes.
.KAR is a MIDI format for Karaoke that includes lyrics as well. kJams, PyKaraoke, and Winamp all play .kar files, though Winamp’s support is a bit strange.
Since the instruments are all generic ones synthesized by your computer, they will all sound particularly cheezy. But sometimes this works out really, really well.