first thing i would do is make sure to get there early enough to stake out an area to set up in. if there's going to be any decent number of people showing up, you're going to want to make sure to get enough room for your setup and some kinda buffer zone, i usually try to get a table or some chairs that can be set up in a way that blocks people off from your mics within whatever radius you can manage without being, as you said, too obtrusive. people are going to move in and out of the space between your mics and the band, unless you can get your mics high enough that they're above everyone's heads (but too close to the ceiling will yeild an evil reflection). i've been kinda annoyed by recordings where it's like "what the hell happened to the guitar? oh, someone is blocking the line from the amp to the mic." ... i personally would use two sm57's in an xy config, but that's because the sm57 is the only mic i own two of. if you have better mics, then use them of course. and yeah, again, staking out a spot where you can get your mics set up and not have people bumping into the stands or walking through your straight-shot at the stage, that's typically been the hardest part for me.
this is kinda funny, but you can get a digital camcorder that has a stereo mic built in to the front of it, and the recording is 44.1k 16bit, so all you have to do is peel the audio off and burn right to cd. i've had great luck with that outside of one small problem, that being that any reasonably loud rock band is too loud and blows out the preamp, so there's horrible clipping problems. they come with audio inputs though (at least my sony does), so you could conceivably set up your mics and plug them into the camcorder and not have any volume issues. that way you've got a picture to go with the sound, which, in my experience, bands *love*. that is if they have any semblance of stage presence.
PS - i've also done a number of recordings like this to an old sony reel-to-reel 2-track that i have. it's got left and right channel mic inputs on it. that's the cat's meow right there, because it's pretty much just two mics and stands and cables, and then you're done. no mixer, no nothing really, just the one box. although you've then gotta deal with the issue of power... battery power can be a life-saver in live recording, since you aren't locked into a smaller subset of possible locations based on whether or not there's power nearby.
hope it works out well for you. and don't forget, since you're standing right by the mics, anything you say can potentially come through crystal clear if you say it loud enough. i recommend covering your mouth with your hand (so as to sound more distant and muffled) and saying something like "man, this singer is so GAY!" during a very quiet passage. bands always get a kick outta that.
