Let me ramble a bit.
My number one piece of advice: Watch the audience. See how they react to different songs, genres, tempos. Do they dance? Are they listening? Are they straining to talk to each other (indicating the music may be too loud in certain circumstances). If you can get them involved with you and your music, you're home free.
If you are playing in a restaurant, ask yourself if the establishment needs the tables to turn over, or do you need to try and hold the audience that is there. If you are playing where alcohol is served, see if the patrons are ordering drinks or sipping slowly. You must not keep them on the dance floor constantly. Make them dance to get them thirsty, then give them a chance to sit down and order drinks. It's all BUSINESS.
Different techniques and strategies are needed to fit the venue where you are performing. If it's a dance club, your job is to keep the music going almost without pause.
Be very careful about inviting requests. You'd better know a LOT of songs before you do.
I have literally thousands of songs that I can play or sing in some fashion, either live, midi file or MP3. I still don't invite requests very often. However, when you get comfortable with playing requests, the tips are usually quite nice. You must be sure that one person or a certain groups doesn't monopolize your performance by requesting all fast, or all slow, or all of anything. You must stay in charge.
Now, more than ever before, you WILL get people from the audience wanting to sing. You must learn to handle that with diplomacy and tact. Be ready ahead of time--it will happen. Many assume we are doing some sort of karaoke anyway. I go out of my way to show them I am NOT. Sometimes you just have to tell them! It's a whole other subject being able to back up guest singers. If you're just starting, DON'T try. They will make you look like an amateur unless you are really good at dealing with them
My typical night consists of maybe 2 or 3 midi files and the rest live, using the arranger. I have thousands of midi files and MP3s available for situations such as Dave described. If you ever need them ONCE, it is worth having them.
One time I got to a job and found I had FORGOTTEN MY KEYBOARD, of all things. I played midifiles from the laptop and sang.
They didn't care. All they want is to be entertained. They might not even know that, but it's true.
I've been doing this for more than 30 years full time, and I'm still learning. A couple of weeks ago, a friend (and SZ member), Joe Lee Richards, videotaped my entire 4-hour peformance. It was very revealing and showed me several areas in which I need to improve.
I've always recorded myself, but never had seen this much video. I recommend it. It will either drive you to improvement or drive you to retirement or drive you to drinking!