The evening, which paid special tribute to Michael Jackson, was billed as a come back event for the world's biggest pop star, but the evening turned out to be a case of more hype than action.
Fans were left disappointed after Jackson failed to greet them when he arrived at the venue, resulting in angry jeers from the crowd.
The show was opened by Beyonce Knowles, who performed a mix of her hit singles "Ring the Alarm" and "Deja Vu," which was arguably the best performance of the night.
During the night, Beyonce also won the award for Best International Female, which was presented to her by Fashion Icon and fragrance partner, Tommy Hilfiger.
Other winners included Kanye West, who was named World's Best Hip-Hop Artist, besting the likes of TI, Busta Rhymes and Chamillionaire, who was incorrectly announced as "Shamillionaire."
The World's Best Pop Artist was given to Madonna and the World's Best Pop/Rock Artist went to Nelly Furtado.
Organizers had announced that Michael Jackson would perform his hit single "Thriller," but Jackson claimed this was a "misunderstanding."
Instead, R&B singer Chris Brown performed the legendary 1983 hit single.
Jackson was recognized for selling over 100 million albums worldwide with a Diamond Award, which was presented by Beyonce.
"He's made such a big impact on my life and on every performer's life," Beyonce said. "Michael Jackson, we love you. Congratulations to the King".
During an emotional speech, Jackson thanked his friends, family and fans.
"I'm greatly humbled by this award. It was my dream that Thriller would become the biggest selling album ever," Jackson said. "I thank God and you for it's success. There have been so many who have loved and stood by me for the 25 years I have been in the entertainment industry. I'd like to thank my children particularly Paris, Prince and Blanket for their unconditional love."
Finally, a teenage choir appeared singing the 1985 mega hit, "We Are The World."
It was supposed to be a step towards Jackson's come back, but the performance fell flat.
Jackson managed to sing only a few lines of the song and during the fleeting performance, his voice appeared to crack and falter on the high notes.
The performance finished midway, when the musical accompaniment suddenly disappeared.
Organizers of the annual World Music Awards have also been criticized for a chaotic and unorganized evening.
Below is the 2006 World Music Awards winners:
World's Best Pop Artist – Madonna
World's Best Pop/Rock Artist – Nelly Furtado
World's Best Rock Group – Nickelback
World's Best R'n'B Artist – Beyoncé
World's Best Rap/ Hip Hop Artist – Kanye West
World's Best Latin Artist – Shakira
World's Best DJ – Bob Sinclair
World's Best New Artist – James Blunt
Diamond Award – Michael Jackson
Best-Selling Arabic Artist – Elissa
Best-Selling British Artist – James Blunt
Best-Selling German Artist – Tokio Hotel
Best-Selling Irish Artist – Enya
Best-Selling Italian Artist – Andrea Bocelli
Best-Selling Russian Artist – Dima Bilan