The story is a hoax. More specifically, it's a case of satire mistaken as news, having apparently originated as a faux news report from "celebrity snitch, Clarence Star" on the site Ghetto Bragging Rights.
Wayne Bledsoe, a columnist for Knoxnews.com, notes that the spread of the false rumor offers a case study in how misinformation is propagated by the online media. Numerous celebrity gossip sites, such as popcrunch.com, reported the false rumor as fact, without making any effort to verify it. Bledsoe writes:
By Wednesday morning, a Google search found more than 10,000 hits for "Knoxville Carjacking Party" and the rumor had been translated into Spanish and French. Not only that, but Web "reporters" often edited out the more ludicrous parts of the story, helping to make it sound more credible. Readers not familiar with the Knoxville murders simply assumed it was a new slasher film.
Some Web browsers left comments on the sites saying that the report sounded like a hoax, but others were quick to defend it. A reader at Current.com insisted: "It's not fake. I don't think so. It's all over the international scene."
The amazing thing is that out of the 10,000-plus mentions of the fictitious movie, no one had apparently contacted Spears' management or record company to check if it was real.