My general nightclub photo settings.
AF Mode: Spot, center
Flash: Manual 1/16th, rear sync, flash head angled to 45° or so. with extra diffuser (Omnibounce)
Pros: Low noise, good depth-of-field, decent amount of ambient lighting.
Cons: Low shutter brings in pre-flash motion bluring in lighting. Ghosting (where ambient lighting passes over someone who moves out of the way prior to the main flash). Flash power too high for candid close-up pics; images are blown out. Sometimes requires rotating the flash around and playing with the angles to get just the right lighting.
The reason for the manual 1/16th flash use (which negates the need for any really high-end TTL flash) is that you get a predictable amount of the flash’s light hitting the background objects. Also, the auto sensor or TTL sensor in the camera will change their power based on what they see in front of them, in turn producing potentially random appearing lighting results. In the club environment this usually ends up with a highly illuminated background, which might detract from the primary subject.
Also, the manual flash mode causes the flash to fire only once. This gains the ability to avoid “sleepy-eye” syndrome cause by the TTL preflash.