I feel your pain on this one. My band is in process of reriodcng our first songs, so we have NOTHING at the moment.But, to answer your first question, YES! It's definitely okay to start booking! Every band has to start somewhere. Clubs are used to bands only having demos when they're just getting started. It does make it more difficult to book, though. However, playing live and getting the shows lets you know if your music even gets the crowd going or not! Also, you can get some sales of merchandise to help offset the cost of reriodcng. To answer your second question, NO! It does not lesson your audience at all! Quite the opposite. It gets people excited to hear your new album! It grows your audience! And it improves your musical ability and how you deliver that music which is great knowledge to bring into the reriodcng studio.Hell, I'm going to be reriodcng just the live show from my band this coming Monday. I'm going to use that reriodcng to put songs up on my site AND create a live album as our first album. Selling this will help fund our first real album (or singles, which is my plan). Man, get out there and don't wait! I've played shows with plenty of bands that didn't have anything recorded yet! My old band, THE THEM, had a horrid demo EP that got us shows up and down the West Coast! There's only one thing to be careful of. If you're in process of reriodcng, I would hold off on booking shows until your reriodcng is finished. You don't want to split yourself in too many directions at once. You will go crazy. Either be reriodcng OR be booking and playing gigs. Not both at once! ESPECIALLY if you are reriodcng yourself DIY style. DIY reriodcng is extremely labor intensive. Another alternative is to just record a good single. My friend's band did this to kick off his shows to great success. He did a single and made a cool little video for it. The video got into the local paper and got people out to his first shows. Hope this helps! Hell yeah, get your band playing shows!!! Don't wait!