I'm mid-run on a production of Cabaret where, as I imagine is common to quite a lot of productions of this show, we aim to make the audience feel like they are truly in the Kit Kat Klub. We've put Chinese lanterns on all the house lights, and they extend into the foyer, as do the mirror balls (there are 100 in the theatre roof - apparently in homage to a nightclub Isherwood used to frequent which was famous for having 100 mirror balls!). We've also replaced the sign above the doors to the theatre - it did say Court One, now it says Kit Kat Klub.
The Kit Kat kids are all out in the foyer and in the auditorium pre-show, interacting with the audience - singing songs, encouraging people to cheer for them when they're introduced in Wilkommen, slipping them lollies wrapped up to look like drugs, pouring them cocktails (if you buy a cocktail at the bar you get a glass and a ticket, then one of the girls has a jug of the stuff in the auditorium and will pour it for you), randomly deciding it's someone's birthday and singing Happy Birthday (in German!) to them. They're also acting as ushers, ripping tickets and showing people to their seats. We're not using any pre-recorded announcements - they're all done in character by the actor playing Max, the club owner, using a period microphone (well, it's not quite, but it looks close enough!).
Our audiences are loving it - you get the occasional grumpy reaction, but mostly they're delighted to interact with the actors and get totally involved - it's only a 300-seat house as well, so pretty much every patron has some interaction with a Kit Kat kid at some point. The cast will often refer back to specific audience members during the show as well, and they seem to love that too!