Many thanks for all your thoughts - Bat Goddess's "energy from the listeners" and Animaterra's description of the "electrical current that makes the air sparkle" are exactly right. However, the energy from the listeners is not an essential ingredient - though it is always a great boost.
As Peg said, it's a combination of profound concentration and letting go. I rarely have a problem concentrating on singing - the song simply takes over and sings itself - Jeri's "great river of sound". If I do feel likely to be distracted I simply close my eyes. (Gasps of shock and horror - I've never understood why singing with closed eyes should be considered so awful since, in my opinion, the result is invariably more powerful.)
I can't imagine why I'd never thought of the magic in "subtle energy" terms before. It's certainly not just a convenient focus for concentration. In fact, no concentration is needed once it has been called into action. Observing it over these past few days, I wonder if perhaps it is the result of the Throat and Heart Chakras working in resonance (now there's an interesting term, in view of the nature of sound!) So maybe it's no wonder that the listener does tune in (another appropriate term) at a gut level.
I had a particularly powerful experience of this soon after we came to live in France... At a rowdy mid-day barbeque party an English friend had asked if I would play Dark Island for him on the dulcimer. It's not a tune that I play well, so I sang it for him instead. The magic was with me that day, despite the difficult conditions, and afterwards a french lady asked me to tell her what the song was about, for she had found it "very poignant" - So I asked her to tell me, first, what she had thought it was about... and (despite knowing not one word of english) she gave me a pretty accurate translation! The actual words had not been necessary in order for the essence of the song to be conveyed at a gut level.
No wonder music is a universal language!