The two main reasons to do sound checks are to make sure you sound good for the audience (the front-of-house sound) and to get a good sound on stage (foldback or monitor mix). Having a crystal clear out-front sound isn’t any good if the music is suffering because you can't hear each other.
Generally in small venues it’s better to set up in a rough semi-circle with the drums in the middle. Usually the bass amp will go next to your drummer if you have one, this will help get the rhythm section tight. As guitar and keyboard amps are more directional it’s better to place them further back and turned in slightly as this will help the singer to pitch their voice. If you raise them up off the floor this will also help project the sound.
In small venues the biggest problem will be feedback. In order to help prevent this take extra care when placing the microphone and speakers. If you place the speakers about a foot in front of the singer and aim them about halfway down the venue, this will give a little of the singers voice back so they can hear themselves. This is not as important in really small venues as the sound will bounce off the back wall.
In larger venues everything will go through the PA and the sound will be balanced by the engineers. Usually there will be one engineer doing a balance for the front-of-house sound and another to balance for the band on stage or the foldback. Soundchecks allow engineers to work through each instrument to get a basic sound set for each. Once that’s done they’ll get the band to play a couple of songs so they can balance all the instruments against each other.
The one person you should never upset is the sound engineer. At the end of the day it’s their job to help you sound your best, don’t go rubbing them up the wrong way. Most sound engineers are professional enough to do their job, however obviously they’ll make more effort if they like you.
Your best chance of sounding great is to listen to the engineer and to do what they suggest; they know the venue and the PA. There is a difference between power and volume, loudest is not always best. If you have to change instruments during your set then give the engineer a set list with details of the instruments featured in each song so they know what to expect.
It’s important to remember that sound checks are not the time for rehearsing or showing off. At sound checks bands check in reverse order therefore everything’s left ready for the first band to go. This very often means that the headline band can take their time when sound checking which means the bands further down the bill may suffer as a result. Usually engineers and promoter won't allow headline bands to get too carried away. If things are running late there are things you can do to save time for when you’re ready to do your sound check such as set up the drum kit and keyboards so you can just move them on when it’s your turn.