It can be played in any scene, with or without suggestions from the audience.
When a meaningful sentence is said, the game leader stops the scene, repeats the sentence and proclaims, "That sounds like a song!" Then, the topic must be sung about in a short song by the actor who said the sentence. The named sentence should feature in the song word-for-word.
The rest of the cast can sing along, for example the refrain, or they can dance in the background. The scene lasts at least until everyone has sung a solo; at the end, there can be a collective end song.
Example with the group Theaterlust: http://de.youtube.com/watch?v=QAismTccDAY
It should be decided beforehand which genres should be sung. That is, the game leader decides not only which sentences should be sung, but also the specific genre.
It can be asked of the audience (possibly in a row of seats or altogether) to call out "That sounds like a song!" at appropriate places. However, the inclusion of the audience can also lead to the audience always giving the suggestion in the following scenes. Therefore, it is recommended that this variation is played in the second half or the end of the show.