AJ got back to me. For anyone who wants to know, I asked about MP3, wav or MP4 and he said:

"None of the above. If using Mp3 or Wav, you will have to find it, type the lyrics as a text file and save it with the same name as the audio and place in the user folder in AUDYA.

When you play the song for the first time, turn the pages then save. When next you play the song, Audya will automatically turn the page at the right time. Karaoke format (underlining or highlighting the song words) is only available with karaoke midifiles.