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Scenario Two: Unlimited time & shots
This is when you can take your time. You should use this time to compose and have some patience to get the right shot. You may shoot less because you won't need to click rapidly. In this case you should go to RAW mode as it will give you far more flexibility during post editing. You will really appreciate RAW when a photo's highlight levels are blown out; with RAW you can recover using Lightroom or Photoshop to control the exposure. You can do this with JPG but the range is probably 10-20% less.
Have no fear, be creative
Just being technically competent is not enough, in fact I have to say being creative equally as important. Learn to see shadows as well as light, experiment with angles, use the people around you and not just the bands you are shooting. If you are not getting the lighting you want (and if the venue isn't too established) then ask the guy in charge of the lights if he can cater your needs! If yo ask nicely then then all do it because they want their work photographed. Take a few risks with your shots and if that means make a few mistakes along the way then who cares! Just don't show the clients.
Mind your shots & your surroundings
If you want to get a great variety of shots then you need to be mobile and be quick on your feet. This will mean you will be in some people's way but that shouldn't matter. IF you're quick enough you'll only block their view for a short moment. You should not be polite but that does not mean your shoot should be compromised. If there is a composition you need to get then take it!
Which ever camera you by the principals are all the same; you have to learn and understand the basics of shutter speed, ISO level, aperture size. 99% of the time your goal is to get a sharp, focused, dynamic and vibrant image.
The first thing I suggest is to switch your camera to Program mode and take a shot. The camera will automatically adjust your settings to take, what it believes, to be the best possible photo; from that basis I will know roughly what settings to use. You could try taking test shots manually but I find using this method to be the quickest. One important thing to remember is your first few shots will be unusable because you will be testing the lighting with the camera so it is important you are aware of your environment before the band comes on stage; you do NOT want to be fumbling with your settings during the performance, that is a guaranteed way to miss great moments.
If I am in a rush, then I have my 'default' settings I use from memory:
Shutter speed 1/200
ISO 1000
F2.8
This is always the base I start with, but rarely stick with. The lights and your subjects will be constantly moving and shifting so I am constantly adjusting the settings; others will disagree however this is the way that works for me and I feel like I am in complete control o the shots. Some of my peers like to just stick to Shutter Priority and although the results are good I enjoy capturing the randomness of some shots that may never have been caught had I let the camera be in more control
Most DSLR's will allow you to shoot in RAW mode or JPG. Other sites like Kenrock's explain it better and in more detail than I can so I won't go into the technical details. Just click this link to Kenrockwell.com to learn more about the 'technical' pros and cons. I will talk about why I use both and when.
Scenario One: Limited to first three songs
I know I will be up against the clock, roughly 10-15 minutes to get all the shots I want (if you haven't done it then you're missing out on a real buzz). My tactic is to shoot sharp, quick and every possible angle; I know I will be wanting all sides when I go to edit in Adobe Lightroom, I also know that some shots no matter how technically good they are may miss that great pose or expression. By shooting at 7 frames per second I limit that possibility. There is a compromise though on the D300; to shoot at that speed I need to go down to High Quality JPG and not RAW. This is not a problem because I shoot in such large quantities if an image doesn't work then I just trash it and not bother with post editing in RAW mode.
Before I start, I just want to say my advice is just based on my experience so far. That is not to say this is the only way but I have been able to capture some recognized shots in the local bands/festival scene.
Recommended cameras and lenses based on budget
I won't alienate photographers who do not use Nikons. I have my own reasons for choosing Nikon over the other brands especially Canons. However the objective is still the same regardless or brand; you need to find a camera that suits your budget and a fast lens. Given the choice I would invest more money into a better lens than a better camera body.
To illustrate my point I can attach a £1200 Nikon 70-200mm F2.8 lens onto a basic Nikon D40x and it is very usable in a gig environment; there are limitations of course but I would feel confident using it. Frames per second would be reduced, ISO noise level would be limited to 800, focusing would be slower but it is all countered because the fast F2.8 allows you to shoot in low light.
However, if I use the £2500 Nikon D3 with a cheap 18-55mm F3.5 I would really struggle to get good pictures from that. Although the ISO is usable up to 3200 the lens just would not be able to keep up. Depending on the lighting rig at the gig you may have to lower the shutter speed down to 1/50 or below just to get the exposure right through the camera. Also, at such a low shutter speed (1/50th) you risk blurred images. Sharpness is a major factor in assessing a good photo.
My recommendations are:
Low budget:
Nikon D80 with Nikon 50mm F1.8
Mid budget:
Nikon D60 with Nikon 24-70mm F2.8 or Sigma equivalent
Big budget:
Nikon D300 or D700 with Nikon 24-70mm F2.8