None of these are the best answer (in my opinion). The best answer would be a place that: (1) has live latin music (2) does not have bright lights everywhere (3) has been vouched for by someone that regularly / recently went latin dancing (4) has to be a place a bit more upmarket than an RSL, but also a bit less intimidating than a dedicated salsa venue (Establishment Tuesday nights) and (5) centrally located in Sydney, as we don't know where you are.

The answer is "The Cuban Place" in Sydney city, near QVB and Town Hall. Google it.

They have a live latin band on Friday and Saturday nights. They are a combination restaurant, bar, downstairs whisky bar, and live music, latin dance venue (yes, they have a dance area in front of the band).

I would go later, rather than earlier, since Latin people stay out late. Perhaps do dinner first, watch the others, then jump in. It is as non-judgemental as you're going to get. Especially compared to Establishment or the other dedicated latin clubs. Establishment and Argyle mostly have canned music. However, they can be great too, simply because of the great amount of people attending, the eye-candy, and the ridiculously good dancers you may witness. The Cuban place is much less intimidating. Just a better all around mix, plus it has a live band.

Try Saturday night. Say, 9pm onwards. Cuban Place. Latin people usually go out very late. Last time I was there, a few weeks ago, it closed at 1am, to a mostly full house. Dance your arses off to the live latin band, try their mojitos, or even come early and have something to eat (however I recommend bouncing from another favourite restaurant so you arrive excited, fresh, and after a brisk walk through the busy city). See how you go.

I humbly think this is the best answer. Enjoy.