My take on the use of backing tracks is as follows:

1) I agree with Notes Norton that the audience tends to be much more OK with it than musicians... but it still has to sound good.

2) Using TRAX isn't an automatic slam-dunk... lots of stuff can still go wrong, and you need to be rehearsed enough to know and prepare for the most common technical problems

3) Try to keep it as believable as possible. Use trax to play songs that other solo musicians might play without trax. Songs that are virtuoso performances just won't fly if the virtuoso part is pre-recorded. On the other hand, if you're playing the virtuoso stuff ... and nailing it... that's a different story

4) As Herb mentioned about Mariah Carey's new year's eve fiasco... a canned track absolutely requires everybody in the band to hear and follow along. I tried to incorporate trax into a couple of bands that had a drummer, and the drummer played so loud he couldn't hear the trax... consequently, he sped up or slowed down and it totally screwed up the song

there's lots more, but those are a couple of the key points I've had to deal with. By all means, pursue the use of trax, especially for small gigs like parties, where the alternative would likely be no music at all.