I just saw the terms and conditions for participating in the Idian Idol 2 auditions. Here is the link where the rules are given in detail : http://www.setindia.com/shows/idol_termscondi.pdf
Just copy and paste the link in the address bar and hit go. The link doesn't work directly.
It seems that 1000 participants are chosen from each of the 4 audition cities based on phone auditions. Of which only 25 partcipants are auditioned by the 3 judges and the other 975 are probably auditoned by other people. They just show us the ones that were auditioned by the 3 judges who probably get the best and worst (for sheer audience entertainment) of the lot. If the judges listen to only 25 contestants then they should be more patient and not be so rude as they were to some of the contestants.
Anyways, just thought I would post the link for the detailed rules.