It really does depend, as everyone says. If I'm in a singaround environment I always say a few words because I'm amongst folkies and they are interested in what's being sung but I'll keep it brief - after all a lot of them will already have heard the song from years earlier.
When working my way through a longer set I'll chat a lot more but wouldn't dream of going into detail about what the song was about as it'd be telling everyone what they would be about to hear. I was pretty much introduced to folk music by Hughie Jones and The Spinners and a lot of people (particularly, Hughie reckons, the Americans) appreciate his stories as much as his songs. I'm not as good a showman so would never dream of trying to entertain more than through an odd line of banter but if there's an interesting history to a song I see it as rude not to let people know it. Otherwise I feel like I'm excluding some of the audience and I'm not doing what I really want - to give other people the full experience of the songs I love and to encourage them to find more of their own.