I'm probably the one to blame for the complicated sentences. It's a "gift".
It is definitely NOT the case that your friends need to be using the app. As long as you tell it who your friends are and where they are (via your facebook friends, gmail feed or Outlook database), it'll find things for you.
However, for that to work, you'll either need to enter bands/teams/shows your interested in (iTunes, last.fm, Facebook), or have LuckyCal connected to your calendar (Google, Outlook, iCal etc.).
I should also note that much of the data in the system is in the US and Canada.