I think that stuff was just generally accepted on the old TV music shows, like "Solid Gold." Although it was obvious, I didn't like it. why go to the expense and bother of bringing the band into the studio and not let them plug in their mics and amps?
On shows like SNL and in live concerts, the audience expects to see a live performance. I'm a purist about this--I feel it's musically unethical to deceive an audience that way. If a singer can't or won't sing for herself on stage, then does she really have any business giving live performances? The stage is where you're supposed to "deliver the goods." I've read a claim that Tim McGraw uses pitch-correction software, but I don't know if that's true.
As for Britney, her lip-synching gets picked on all the time by both critics and by rock fans. Her popularity is based mostly on image and studio production, anyway, and most people know that. It just bothers me that performers like her can become famous without any soul or deep emotion in their performance.
Sorry, I'll get off the soapbox now...