There are quite a few bands/performers that allow audience recording. The Steve Kimock Band is one and he offers wonderfully inventive guitar playing and jams that will make your hair stand on end. You can also simply download his shows for a modest fee from his website (www.kimock.com).
Here some bands tha allow taping. I have also found many jazz acts encouraged me to make a recording if I took the time to politely ask and offer a copy of the recording to the band. The quality of sound you can get with a pair of quality mics and a professional CDR or DAT recorder is amazing truly. Vintage tube mics (rebuilt with better components usually; you know the drill) running into a Grace mic preamp (with a quality A/D converter) that outputs a digital signal is the way to go. That will output into a CDR, DAT, or notebook (then you can record at 24/96khz for truly high fidelity).
Here are the bands:
Radiohead
Upside Groove Coalition
AC/DC (I thought that was interesting)
Allman Brothers Band
And You Will Know Us By The Trail of the Dead (not a great band, but a great name)
Andrew WK
The Ataris
Ben Folds (Five) (no mic stands, no video)
Big Head Todd and the Monsters
The Big Wu (until last year, they even allowed people to patch right from their soundboard--too many takers)
Black Crowes
Blues Traveler (allow some board patches)
Billy Bragg
Candlebox (yes, but who cares?)
George Clinton and the P-Funk (they allow audio taping, but have rules like "Most of all, Aint No Party like a P-Funk Party.")
Clutch (these guys are great!!! they allow audio and video)
Counting Crows
Cowboy Junkies
Darkstar Orchestra (allow a "daisy chain" patch)
Dire Straits
Drivin n Cryin (some bands I put on because they made me giggle)
Ekoostic Hookah
The Flaming Lips (bring them to summerfest now!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!)
Bela Fleck and the Flecktones
Fugazi (but the singer doesn't want anything released)
Funky Meters
G Love and the Special Sauce
Galactic
Godspeed You Black Emperor (they are great)
Government Mule
Grateful Dead (or what is now known as the Dead--they are to blame for all of this great taping)
Guided by Voices
Guster
Arlo Guthrie (even has a tape trader's board on his site)
Ben Harper (but it has to be stealth)
Indigo Girls (that ones for UWW if she see's it)
Iron Maiden (for proteus' cd player. Bruce was quoted as saying "F*** (expletive) Metallica - Record any you want! And spread it on the Internet if you'd like!")
John Brown's Body (these guys sometimes purchase copies of their shows from tapers)
Lambchop (that's right "i hate summerfest" lady, even your sock puppet band likes this:))
Los Lobos
Maroon 5
Dave Matthews (Band)
John Mayers (yucky)
Medeski Martin and Wood
Metallica (they are strict, but probably said yes to tapers because they are sick of taking freedoms away from people)
Moe
Mogwai
Motley Crue
OAR
Ozomatli (great great live band)
Pearl Jam
Phish
Willy Porter
Queens of the Stone Age
Rage Against the Machine/Audioslave
The Roots
Rush
Rusted Root
The Samples
John Scofield (AKA, god of the guitar)
Seven Mary Three
SidePocket (hello proteus)
Sigur Ros
Spoon
Tenacious D
U2
Umphree's McGee
WEEN (yes)
Wilco