Mechanical License (vs 'Fair Use')

I just got a contract to record all concerts for one year for a school.

The director is concerned about copyrights and wants me to obtain all required mechanical licenses (he will pay for).
All sales of the DVD's I make (video too) will only be to students and parents.

1) If a work is in the public domain but students are recording a recent arrangement, is a license required from the arranger?
2) Since this is for archival and personal use only (probably only 20-30 copies made for student performers), does that affect the licensing requirments? (ie., the school will not profit from these sales but I will).
3) Are licensing fees usually negotiable?

Thanks.

pretty much what mike_mccue said

depends on the music really.. elgar isn't gonna chase you for royalties

it varies from country to country with some things. even things like licensing you can get offered a "buy out fee" which is a total one of payment, my friend does music for TV the odd time, and he doesn't get a royalty every time it's played.

before club dj's didn't have to submit their play list when DJ'ing.. now they do... it's a bit of a nightmare esp With Drum n Bass, since a lot of the stuff is on "dub plate " (given to a DJ months before it's available) . The producer wants the DJ to play it out so people are quick to buy it when it's eventually released.