Standing still might be an issue if you're after performance shots, but then again blurring can be desirable for this sort of shots - within limits. I recently attempted to take some photos of a friend's band live (the downstairs of the Betsey Trotwood, as anyone who's been there can confirm, is a small dark shoe-box somehow masquerading as a music venue) with my own compact digital, which is also only capable of 400 ISO and has a maximum aperture of f2.8 (the Powershot's lens is f2.2, right?). The results were totally unusable without flash, and with flash I only managed to get a couple of lucky shots where the guitarist wasn't blinded. Even then some serious Photoshop work was needed to undo the effects of the on-camera flash. Afterwards I realised I should have done two things...
1) Plan ahead! A tripod, something to diffuse the flash, getting in before anyone arrived to try shooting from different angles... any of these things would undoubtedly have resulted in better images.
2) Don't use a non-SLR digital.
The last one is debatable. A camera like that might be perfectly adequate - if you have the right lighting conditions. In this case you have been asked in advance so unlike me you have time to plan. In terms of composition, discuss with the band members what sort of shots they are after (but don't be limited by that - you may come up with something they didn't think of). Shoot lots and lots of photos, and then some more. Later you can get rid of those you're not happy with, and the band can choose the best from a good bunch. As for settings, a larger aperture (i.e. smaller number) is almost certainly better - though the image quality may be better slightly stopped down, e.g. at f2.8 rather than f2.2. I don't know the camera so can't really comment on that. Meanwhile faster shutter speeds are essential unless you want to blur for effect (e.g. to draw attention to the motions of the band members playing) but you generally wouldn't want everything blurred, so no exposures lasting several seconds, and don't even think of not using a tripod with shutter speeds under about 1/60th (higher if the lens is zoomed in).