I thought it was brilliant when Egg was cooking in the kitchen with The Killers blaring out and the camera was darting around all over the place... it was just so Egg!
"God saved me from drowning... then kicked me to death on the beach."
I thought he did know who the K Chiefs were, it was Miles who didn't because he'd "been in Hong Kong" which seemed to be his explanation for everything. I agree though sloppy writing generally.
At the risk of reading more into it than was intended by the script: maybe Egg, as a house guest of Miles, was borrowing one of his host's CDs, and perhaps it had been left in the CD-player. Or it could have been a random track that happened to be on the radio.
His vagueness about Kaiser Chiefs seemed to be a script device to convey how out-of-touch with the music scene he had become now that he is so ancient (even though Egg is only a few years older than the members of Kaiser Chiefs, and Andrew Lincoln is only about 33). Or perhaps it simply reflected their album title - after all, he always did have an aversion to conventional Employment...