If pop success was a fair reflection of skyscraping musical ambition, Mercury Rev would have been playing Wembley Stadium instead of this indie-rock shed in Brighton. Acres of critical coverage have been devoted recently to Coldplay and Keane refreshing their timid soft-rock palettes with electronic textures and club-friendly beats. Yet Mercury Rev achieved a similar but much bolder reinvention on their latest album, Snowflake Midnight, which incorporates trance techno rhythms and ambient symphonies into their neo-psychedelic sound.

Often cast as perennial bridesmaids to their more famous friends and collaborators, the Flaming Lips, these upstate New Yorkers have enjoyed mixed critical and commercial fortunes during a career spanning more than 20 years. They remain an engaging prospect live, although the sheer scale of their ambition sometimes muddies their best intentions. Less is never more for Mercury Rev.

Their Brighton show began with a video montage paying tribute to musical and literary heroes, from David Bowie to Billie Holiday to Henry Miller, all soundtracked by a vintage Cocteau Twins track. The set that followed tried to cram half a century of rock history, beat poetry, hippie mysticism and operatic emotion into two hours, which was commendably adventurous but, inevitably, a trifle indigestible in places.

Still slender and boyish at 42, the singer Jonathan Donahue is an impressively energetic showman. Pinballing around the stage, he struck messianic poses, played imaginary drums and threw invisible thunderbolts at his fellow band members. Although a beatific smile rarely left his face, he hardly communicated with the audience. At times his performance felt more like private ritual than public spectacle.

Tracks from the new album bookended the set, providing many of the evening’s peaks. From the starry-eyed disco-rock gallop Snowflake in a Hot World to the crashing crescendos of Senses on Fire, these newer songs had the propulsive momentum of rave anthems. Likewise the snappily titled People Are So Unpredictable (There’s No Bliss Like Home), which wrapped jackhammer beats in shimmering electronic clothes.

There was a marked contrast between the new material and Mercury Rev’s older tunes, which tend towards plodding rhythms, seesawing melodies and gently throbbing piano motifs. During Holes and Goddess on a Hiway, the band’s best-known former singles, Donahue’s fragile choirboy voice recalled Neil Young as the musical backdrops ranged from plaintive country-rock ballads to tumescent cosmic epics. Several lesser numbers in this style clogged up the middle of the set, relying on unfocused bombast to paper over fragmentary lyrics and feeble melodies. When they overindulge their psychedelic side this way, Mercury Rev can be as tedious and repetitive as any 1960s acid casualties. After two decades of stargazing splendour, this tendency remains both a key strength and fatal flaw – mistaking bigness for greatness.

Thursday 13 November, 2008, Shepherds Bush Empire, London W12; tomorrow, Oxford Carling Academy

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