My approach is to jamming/practice is to do the homework on the songs we plan on doing. Unless your band practices 5-20 times a week nothing replaces repetitive individual practice to make playing the tunes second nature. There is everything to be said for committing the chord changes, fingerings, riffs, etc.. to muscle memory. Musicians must have a high degree of tolerance for repetition.
Basically everyone in the band (or jam session) must come prepared with their homework done. Standing around while someone fiddles with their part is counterproductive especially if they have had time before the session to work on it. And while the jam session/rehearsal is going on it's essential to agree on the structure of the song (beginnings, verses, choruses, lyrics, harmonies, reps, transitions, bridges, endings, etc.) before
the band launches into the song. This is especially true for songs like Terrapin with it 6/8 transition and the instrumental break in Greatest Story. Running through the rough spots as a band a couple of times or more before attempting the entire tune goes a long way to avoiding a train wreck.
If one or more people need help clarifying a part of the tune and getting on the same page before starting the tune other band members should refrain from noodling around making communication impossible, this is a big pet peeve of mine.
Stay positive, if you are doing a song for the first time and you get through it with a couple of burps eventually with enough reps the song will smooth out. Do the homework, come prepared, discuss the song structure as a group, and try to get together as often as possible.
Play from the heart, "play as if your life depended on it" (Jerry G's own words), do your homework and your practices/jam sessions will reflect that.
My $.02 worth......
Keep spreading the music good people!