I absolutely hate those "Idol" shows, but I've been bombarded with this story so much that curiosity got the best of me and I checked it out on youtube. This is stupid on so many levels I don't know where to begin. First of all, this woman has been performing for years, and she has had something out on a CD for a quite a while, so all the fake surprise is utterly ridiculous. I'm sure the show's producers already knew she could sing. And even if Simon and crew weren't already informed of her talent (which I doubt), it shows an extreme lack of intelligence to believe that beauty and personality have anything to do with a person's singing voice, and to then suddenly have a miraculous revelation that it doesn't by hearing one person sing.
She had a CD that had a pressed run of about 2000 copies, and performed mostly at her local church. She'd hardly be that well-known.
It was indeed very obvious the producers knew she could sing, but I'd hazard a guess and say they deliberately didn't let the hosts in on it in the hopes they'd be genuinely surprised.
As far as judging people's talents based on their appearance... People do it all the time. Always have, always will, no matter how stupid it may be to do so.