I on board with the "both" wagon. I definitely think you need to keep an eye on what the congregation is doing and what your band is doing. But at the same time, it has been my experience that the congreagtion is looking for direction constantly and tends to mimic your actions as the leader. If i have my eyes open constantly, scanning the people, I notice that the congregation has a tendency to want to let their eyes wander around as well, and when people see me close my eyes and lift my face to God they seem to realize "oh yeah, that is who we are singing to." so I try to keep a happy medium.
Little bit of both, some times i get so filled in the spirit that i just want to focus that adoration towards God. Other times i might need to look briefly at the music or towards the congrgation to see i the are engaging.
I have done both in the past. Our pastor would sort of complain that we would all have our eyes closed or my wife would say something after a service that the whole band had their eyes closed or a grimmace on their faces, etc.
For a drummer especially or other band members, it is very important to see and hear the worship leader or other band members to know how you are grooving together with them.
When I would run sound on the tech team in the past, the drummer would close his eyes and he had a tendancy to drag or speed up. The worship leader would be giving him motions (body language or signs) to speed up or down or play louder/softer. The drummer would not see this with his eyes closed and it caused problems sometimes. So it is important to periodically check on the team and the congregation to look for communication.
FWIW, as a professional musician, I'm constantly playing with my eyes closed. I actually think that some of my more inspired playing comes when my eyes are closed. It's a totally unconscious, natural thing for me. Your mileage may vary...
I generally leave my eyes open because of the connection with the poeple, but I too am worshipping and will close my eyes to set aside the distraction of others. If I am teaching a new song, I have my eyes open. No hard and fast rules!
I for the most part have my eyes closed on worshipful songs and open on praise or fast songs. I have always felt as a worship leader I need to be the example of worship and for me that is having my eyes closed and closing out all that is around me.
I focus more on where my heart is during worship and I personally think this is most important. My eyes are generally open because I look at sheet music a lot as a keyboardist. Once in a while they close if I know the song really well. It really doesn't matter whether your lids are open or close, it's whether your heart is open or close. An open heart for Jesus is all we need. Blessing Phil!
I would also do both. I think that as I am led in to that space with God, that I naturally close my eyes to better focus on who I am worshipping. But as we encourage those we are leading and helping to bring to a place where they can have a new encounter with God, I think it is important to have that connection with those around us, to say and indicate that we are in this together and to make eye contact with them. But the prayer will always be, that at some point during that connecting time, that those who I am leading will not even notice that I am there and obviously at that time if I have my eyes open or closed will not matter to them.
I agree with Mark that "different circumstances have different requirements".