OI
We do the same thing here in Austin at Elysium on Tuesdays.
It has been pretty fun, and so far has worked out. As for our setup we have,
2 Wireless guitars,
Wired RB mic (since someone broke one of our other mics, went back to el cheapo)
1 Wireless Drum kit (RB2/ debating on Ion, setup)
2 Projectors, one behind stage and one slightly off center near stage right.
We use the Xbox 360 well because it is cheaper than the PS3.
2 DJs for entertainment between song selection,
About 4-5 "House musicians" to fill in if a full band cannot be located for a person.
well over 400 songs and a constantly updated set of lists organized by song, band, and recent additions.
most other info can be found here
http://www.rockband.com/forums/showthread.php?t=111714