Well, in a bar environment, the vocals part is pretty much considered normal. It reminds people of Karaoke, which is already an established past time. Unfortunately, getting people to play the other instruments can sometimes be a challenge. Especially here in Austin, where practically everyone is a musician. (not literally, but there are so many here that it seems that way, sometimes.)
They seem to shy away from the plastic instruments for a a good while. Each of them, eventually, coming back to try them. Maybe not the first, second, or third visit but they get there eventually.
We go through more vocalists than anything else, but with our last stun, started gaining a few guitar players. Our Bartender wanted to play, but he was behind the bar; so we took him a guitar and let him jam out on Ride the Lightning. Heh, and every once in a while the guitar sounds would die, as he got someone a drink. Pretty fun, and awesome.
I think that after you get it down, and people start thinking about it as an established entertainment stunt, they will start signing up for it more often. And with this, I suggest trying to get as many different people to go up as possible. especially if you are first starting out.
Even if you have to bring 5-10 friends and have them play on stage randomly, at different difficulty settings (this helps break the omg I am gonna suck mentality) It should spark the interest in the average Joe.
Oh..... And finding people that won't just stand there, stiff as a board and stare at the screen, may help a bit also. I watch those people and it seems boring to me.