Subject: when you sing off-key, do you hear off-key?

My roommate, whom I love dearly, cannot sing to save her life.  She loves 
to sing, however, so I get lots of time to think about the ways in which 
she sings off-key.  She's not just consistenly sharp or flat, but puts 
together note combinations that never existed in the original version of 
the song.  She recognizes hundreds and hundreds of songs, and can usually 
start out fine, but a few notes in, she's all over the map.  Which, if 
we're singing together, eventually drags me off-key, too.  My question is: 
when I'm singing alone and she's listening, if I can't remember (and 
reproduce) the accurate tune, does she recognize this?  When we're singing 
together and I sound just like the radio, then, slowly, I sound just like 
her, does she recognize that I'm off-key, too?  If she has a keenly 
developed sense of audio recognition (like I said, *hundreds* of songs), 
what is getting in the way on the production side?
I guess you could sum it up:  is the sing-bone connected to the ear-bone?

Re: when you sing off-key, do you hear off-key?