The darker the better. It would be worth it to drive away from the city lights, if for no other reason that to get away from the horrid color cast of sodium lights. You don't have to get that far away, but definitely get out of town, my opinion.
Regarding settings, sound advice has been given so far. It really depends on the brightness and the activity. I've captured aurora I didn't even know was there shooting at higher iso and 30 sec, I've also shot extremely bright and active aurora at around iso640 and 1-3 seconds, it all depends. Don't be afraid to push the iso to shorten your shutter speed, you'll be able to capture more of the curtain effect that way. Sometimes, though, the aurora can be relatively static and you can capture sharp curtain lines with 15-20 sec exposures.
Personally, I use the widest lens I have with the aperture opened as far as it will go. Definitely use a tripod (obvious), and get a remote release for your camera, wired or wireless. Failing a remote release, use the built in timer, so you don't end up with any camera shake from pressing the release. A headlamp is an valuable tool when shooting auroras. And when you come in from the cold, put your cold camera in the cold camera bag before coming inside, and let it warm gradually over the course of a few hours. Take the card out prior and stick it in a ziplok bag before going inside so you can review your photos earlier. Otherwise your camera/card *WILL* be covered in condensation, and that's not a good thing.
I shoot tens of thousands of aurora photos from my backyard every year, if you have any more questions, just ask.