What is the usual set up shooting on events i.e clubs, lounges etc,

I tried it in my room with a lamp and a strobe light to kinda replicate the club environment and i came up with shutter speed - 4 and aperture of 4.5 with 500 iso no flash

but i notice i image are sometimes are blurry oh yeah im using the Manual mode.. I'm really to DSLR. Inputs and additional info will be really appreciated. Thank you.

Nikon d80

Should i use flash? just worried when using a flash will kill the whole club scenery.. please help.
Update : I only have 18-135 mm and 55 -200 mm

I yes thank you i meant 4" what does make it wide as possible means?

I want the people to be sharp... and blur the lightings or the backround.. I only have the built in flash.

My first shoot will be on saturday. I'm kinda nervous that will will have crappy photos....

Your replies are much appreciated.