I am also in the PCM-M10 camp but have no experience with other recorders. Its internal mics are good and it has a screw mount if you want to just put it on a tripod in the middle of the group, or wherever the blend is best--its mics are omnis.
It does have little rubber feet but if you are going to put it on the floor, put it on something soft to dampen vibrations from the floor.
A very portable, good-sounding and pretty inexpensive pair of external mics is the Sound Professional BMC-2. They are the size of pencil erasers and with the clips you can put them in all sorts of places--including your shirt collar, though if you are the one singing that would make you much louder than the rest of the group. (Same problem with the headphone mics.)
They are $59 by themselves, $69 with clips, and if they are going to be getting a lot of use it's worth it to get the 3-year warranty for another $6.
http://www.soundprofessionals.com/cgi-bin/gold/item/SP-BMC-2Ideally, though, if the music is going to be loud you should also get one of the little battery boxes with them, and that would add another $59. With the battery box you'd go mics--battery box--Line-in.
The quality of the mics and where they are placed is by far the most important factor in how the recording will sound. If you can experiment a little before the session gets started, you should try various options.
Oh, and djembe, not tablas or pakawaj?