Hey all just thought I'd throw my thoughts into the ring. I've spent the past two years promoting shows, managing bands and putting out a couple records as well as playing my own stuff. I also just graduated from uni where my dissertation was on this kind of thing. So hopefully I'm not completely full of crap.
The best tips I can think of to help (that I've seen work) are;
I think the real key to expanding your fan base and getting recognized outside your group of friends is just to play as well as you can, every time you play. When you do a gig, even if there's only one or two people there, play and perform as well as you can. Growing a band is a battle, you can't win by just sitting there and plotting things out on the internet (although by no means should that kind of thing just be dismissed).
Play out of town as much as possible, because then you're always playing to people who haven't seen you, and all it takes is to win one person over, they'll tell their friends and it can grow from there so every time you play in a place you should gain one or two fans (at least)
Get good recordings and use them. This i where the internet comes in, get some good quality recordings (but don't spend all your cash doing so) and put the some place for free download, not just streaming. Don't record every song you have, but make sure you've got two or three. I've met a bunch of people who were won over to a new band because they were able to stick the bands stuff on their ipod and listen to it on the bus. Stick the recordings on cd's and send them around, to radio stations online, local, international, whatever just send them around if you've got good songs and recordings someone in some backwoods station will like it and play your stuff.
Promote your own shows. It's not hard to do if you have a bit of sense about you and are willing to take the risk financially. Find bands that your friends will like, and that will hopefully pull a bit of a crowd on their own, (depending on the length of the gig you probably want 3 or 4 other bands and at least one of them from out of town) get your friends along so there's some audience and the other bands should (hopefully) bring some as well, and seeing as how you put the bill together fans of one band should like the others, and it creates opportunities for doing gig swaps, and if you're lucky a bit of cash. The problem here is that you might lose a fair bit of cash.
I think it could probably all be summed up like this though.
Always play and perform to the absolute best of your abilities, and try to create, look for and offer opportunities for music and other musicians.
sorry for a bit of long and rant-like post.