Since E3, little has been mentioned about the game. It has been rumored that it will be turned into a game, but what Nintendo will do with the demo, dubbed Wii Music, is still unknown. If the game does launch, it would most likely include classic Nintendo songs such as the Mario theme song, the Zelda theme, and other great pieces of music like that, including orchestra music by Bach and Mozart.
The only problem with this would be that if you tried to add "Oops, I Did It Again" into the game, the song would not be as satisfying as a classical piece because the vocals would slow down and speed up to much. So obviously all songs would be limited to songs without a person singing.
Would Nintendo allow users to put their own songs into the game? It is highly likely, because doing this would sell more units than without it. Plus Nintendo would not have to put as much work into creating the game. We'll only have to wait and see if anything becomes of this game, but our bet here is that it will be coming out sometime next year.