Hi my daughter is 7 year old and loves singing so I want to buy her a karaoke machine. Any ideas on what's the best? And can you use any cd?

You can buy, what they call a stand alone Karaoke machine on Ebay. You can plug the mike into the machine and use a cable to go to the TV. You can also buy karaoke discs from Ebay as well. Though the machine will play ordinary CD´s they won´t show the words. So you will also have to buy a mike as well.

Depending how much you want to spend, something like one of these -

A basic audio-only one:
https://www.amazon.com/Singing-Machine-SML385BTW-Loading-Bluetooth/dp/B01F5LW3F8/ref=sr_1_2?ie=UTF8&qid=1482478962&sr=8-2&keywords=karaoke+machine

Or, this one has a screen and displays the lyrics, when you use Karaoke CDs:
https://www.amazon.com/Singing-Machine-STVG785W-Karaoke-Lights/dp/B00FE8JSUG/ref=sr_1_12?ie=UTF8&qid=1482478962&sr=8-12&keywords=karaoke+machine


Note that Karaoke CDs are specially made, the music has the lead vocal omitted and extra data is added to display the song lyrics when played on appropriate equipment.

They are produced by several companies but Sunfly are probably the biggest:
https://www.amazon.com/s/ref=nb_sb_ss_c_2_7?url=search-alias%3Dpopular&field-keywords=sunfly+karaoke&sprefix=sunfly+%2Caps%2C211&crid=3PBQLKOSC89S6&rh=n%3A5174%2Ck%3Asunfly+karaoke

You can use normal CDs, but you won't get the lyrics display and the singer is competing with the original vocals.

I don't know much about karaoke machines but I know about audio equipment. Don't just buy the cheapest one you can find. CD's are universal. Any CD player can play any CD. They are not country coded like DVD's. Karaoke CD's probably have some special qualities which contain the lyrics like a DVD and I must imagine that they will work with any karaoke machine.