On our latest CD, because I was busy directing the band, I played all my keyboard parts into a midi sequencer and recorded them to two tracks with a drum machine bass and snare part on a third track. The band came in and layed down the bass, drums and rhythm guitar parts at the same time. It worked really well and I didn't have to concentrate on four things at once. On one tune, our drummer was so locked to the tempo we decided to keep the bass and snare click track on the album.
I agree the use of just a click can be hard for some musicians to play with. Also, if there are tempo changes or timing changes in a tune, I'll use midi to create the drum click track and record it to one track ahead of time.
On acoustic recordings I'll use a stick hit and a tambourine sound for the click and lay the guitar part or even a keyboard bass track down for a guide. They usually get erased and redone after the rest of the group has recorded their parts.
The main point is to make sure the musicians know how to play the song on their own without hearing any other part. If they don't know how the song goes it can be a mess.