Entirely computers. Hatsune Miku and similar software are basically voice synthesizers geared towards music, as I understand it, not hugely unlike other text-to-speech programs but with more control of pitch, tone, and so forth.

Also, as far as making artificial intelligences compose and perform, it might be interesting to hook up Hatsune Miku to a Markov chain generator[1], and feed it a bunch of j-pop as input. Would probably take some fine-tuning and modification to get it to give output that the synthesizer would understand (as it would be dealing with both words and notes), but it's not too far fetched.

[1] Which isn't an AI by any means, being more of way of generating text based on statistical correlations between words in the input body of data, but it comes up with some rather interesting things.

Fully voiced by the computer. Think of a midi keyboard that also has a 'syllable' component for each note: So for example you make her sing the syllable 'Ka' in middle C. There are also a dozen or so other knobs that control how it is sung at that particular point in time.

You input the lyrics, notes, scale, tempo and dynamics; the software will produce a voice based on those parameters. Then you can record it to share it as an audio file. Here's a quick FAQ on the official site: http://www.vocaloid.com/en/technical_faq.html