According to Turner:

When you play, you watch only the Christmas lights, but the audio you hear is from the Wii, so your flubs are broadcast for all to hear (people in cars can tune 99.1 and crank it up as loud as they want.) When we are not playing, a separate version of the program that has the audio from the recorded game plays with the lights as a loop.

It would have impressed me if they were actually playing expert mode.