Here you can see the semitransparent plane and the pixelation and that they are not standing on the ground:

http://www.youtube.com/watch?v=u_gBSWE_KYE&feature=related

I would NEVER EVER pay any money to see virtual people singing to me in a concert! Stupid.

But I saw it previously some years ago in Hamburg in the musical production "Dance of the Vampires" (dt:Tanz der Vampire). The screen spanned the whole stage and they used it to draw heavy weather effects like snow, rain and falling leaves - and when people walked behind it, it really looked like a tough outdoor scenery. That was cool!