Lyrics are normally inserted into a midi file as meta events. Most sequencers will allow you to enter the lyrics into the event list. This is a bit awkward though. Power Tracks Pro has a lyric editing window and you can align the lyric with the music in the notation window. It's only $29 so even if it doesn't quite do what you want you still have a good cheap sequencer. (www.pgmusic.com)

Bryan