Go on MySpace and look for bands in your area. You could probably find one that'll gladly play for free or at least very cheap.

Along the lines of Jell-o, Jell-o shooters made with Pucker are always big hits. Just pour 'em into Dixie cups and make different flavors.

I'm tempted to second the bounce house suggestion, but I don't think it's wise. I'd say there's an 80% you'll end up with an exploded bounce house and a lot of explaining to do.