Most Irish sessions I've played in, if someone starts up a bluegrass tune the company would join in and play it. Most bluegrass sounds fine with the odd bodhran and bones and a whistle. Green grass. (Blue grass sessions arern't so accommodating I get the impression. I had a friend visited one, and afrer one tune ended he absent mindedly started playing a jig, and they all just stared in shicked disbelief.)

I think the thing about knowing a song and learning a song often gets confused with memorizing a sing. If having the words in front helps you remember the words and what they mean, and stops you feeling nervous, there's nothing wrong with that - what matters is that you've taken the time before to learn it and to know it, so that you understand what it is you are singing, and aren't just reading it like a machine.

That applies just as much to people who dispense with the book - it is quite possible to memorize a song and be word perfect and note perfect, and have no understanding of it, and not to "know" it any any real sense. (And that goes for tunes as well.)