Everyone has an opinion on engagement parties and what is appropriate or not appropriate. Not every engaged couple has an engagement party, but if you do want to have one, it's important to think through the details.
It should be far enough away from the wedding so that people don't worry about spending a ton of money on separate gifts for the same people. If the engagement party is just a month or two before the wedding, the couple may come off as greedy, since they will be asking guests to spend money on the engagement present, a shower present, and a wedding present in a short amount of time.
I also think if you are having a party where people are bringing gifts, then you should supply drinks and a meal. It would be proper and only fair to your guests to go out of your way and spend money on them just as they are spending money on you. It's a good idea to have engagement parties in a private home and provide a spread of food, or, if you decide on a restaurant, be sure to pay ahead of time instead of having your guests foot the bill.
I also think someone else should plan the party for you. It is nice to have your favorite people, including friends and family, all get together to either meet for the first time or just to hang out if they have previously met. You can also tell people not to bring gifts if you worry about what people may think.
Engagement parties again are not necessary but are definitely fun when planned the correct way!