Dim light, Rebel XT, f8, kit lens, high ISO, low shutter speed, dont move a muscle, ... this sounds like a recipe for a soft and grainy image.
The f8 will require a high end ISO if the lighting is anywhere near what a restaurant normally runs. Low shutter speed will add to softness, as will the kit lens, and any movement at all at 1/20th. The high ISO will add in nose, and at f8 I'm betting we are talking ISO800 or so, which is pretty dismal on the XT for noise.
I would go with f4, thats two stops of extra light. The softness from the lens at this aperture will be less than the softness from movement and low shutter speed at f8 IMO. Let the 420ex put out a bit more light which will help with freezing the subjects as well and create apparent sharpness. ISO 200, at most 400, should be sufficient unless its really dark, and lower the shutter speed to 1/30th or 1/60th and see what you get for ambient background lighting. Use the 420Ex off camera on a stand, and a diffuser if possible to avoid any harsh light. If the room is tungsten, put a slightly orange gel over the flash lens. This will help blanche it somewhat with the warmer ambient lighting (unless its fluorescent!).
The best way to do this would be to have a 3 or 4 light strobe setup
If you can rent one and figure learn how to do a basic full length portrait set it up in time before the event, the quality level will jump up quite a bit and make your whole life easier. Well, at least your whole life for the duration of a few hours 