Which Is the Best Super Bowl Halftime Show Ever? (Billboard.com)

Yep, it's a known fact. There was even a bit of a controversy about it back then, but despite that it still remains iconic. She does sing, but her mic is turned off and what everyone hears is a studio version. It was confirmed by her publicist, the NFL etc. You can google more info about it if you want.

Other artists like Jennifer Hudson, Faith Hill, Mariah Carey also lipped the national anthem.

Thanks. I looked it up and indeed it was later admitted it was lipped:

In the days following Houston's performance of the national anthem at Super Bowl XXV, a controversy arose when it was reported that she lip-synched to her own pre-recorded version of the song by media such as the New York Post, USA Today and St. Petersburg Times. Larry Estrin, the Super Bowl engineer, told USA Today that TV viewers actually heard the studio version, "plus her live voice, plus the audience reaction," and added that "She sang the melody and words the same way (as the studio version), but she sang her heart out."[SUP][69][/SUP] St. Petersburg Times, in its February 2, 1991 article of the Florida Orchestra, wrote that "Both Houston and the orchestra recorded the music before the game.[...] Some people have speculated that Houston lip-synced the National Anthem at the game."[SUP][70][/SUP] On February 4, 1991, Mary Jo Melone of the same newspaper, in her article of Houston's Super Bowl performance, clearly stated that "It was the Memorex. The singing and music you heard were prerecorded."[SUP][71][/SUP] Bob Best, an NFL pre-game entertainment official told USA Today that the NFL chose the recorded version because "we felt there were too many risks to do it live." USA Today reported that it is customary to use pre-recorded versions of the anthem at games, adding that in the past such stars as Diana Ross, Barry Manilow and Neil Diamond have sung to their pre-recorded versions of "The Star Spangled Banner."[SUP][69][/SUP] Best, in an interview with the New York Post, also said that what was played was "protection copy"?it's so-called to protect against the singer's last minute inability to sing?Houston recorded several days before the game at an L.A. studio.[SUP][72][/SUP] Kathryn Holm McManus, former executive director of the orchestra, in an interview with St. Petersburg Times in 2001, reaffirmed that, saying "At the game, everyone was playing, and Whitney was singing, but there were no live microphones. Everyone was lip-synching or finger-synching."[SUP][2][/SUP]
During this controversy, Ms. Houston's personal publicist, Regins Brown said that "Our understanding is Whitney sang live." Brown added that the song was recorded in a studio several days before the Super Bowl, which has always been the National Football League (NFL) policy, stating "NFL policy is that when they have a performer singing the national anthem for live TV, they request the performer record what they call a protection copy, just in case the singer has laryngitis, the day of the Super Bowl."[SUP][69][/SUP] Dan Klores, a spokesman for Houston, explained "This is not a Milli Vanilli thing; she sang, but the microphone was turned off. It was a technical decision, partially based on the noise factor. This is standard procedure at these events."[SUP][73][/SUP] According to Jet magazine, similarly, several music industry officials including Estrin emphasized that "this issue is not a case of Milli Vanilli, because the bottom line is?it was Ms. Houston's voice that we were hearing."[SUP][69][/SUP]

http://en.wikipedia.org/wiki/The_St...itney_Houston_recording)#Lip-sync_controversy
 
When the live vocals came in during Man In The Mirror at the grammy's it took the performance to a whole other level

You are so right it did take it to another level it was like Michael was touch by God and he felt God spirit Michael just went to church on that song it was a awesome performance.
 
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