Luna, ULU, London

If there were an award for noble persistence in the face of commercial near-indifference, the New York band Luna, and their main man, Dean Wareham, would be contenders. Since leading the gorgeous Galaxie 500 in 1988-91, and forming Luna straight afterwards, Wareham has got his brand of mellow, mellifluous and modestly melodramatic dream-rock - think Velvet Underground at their most simultaneously vivid and vaporous - down to a fine art. Little wonder, then, that he has decided to call it a day on Luna: their work is done.

By the law of averages, though, you might have expected them to score some success on the way. Fair dues, and all that. They came close a couple of times, granted, once via a profile-raising support slot to the reformed Velvets, and then with a cool-as cover version of Serge Gainsbourg's "Bonnie and Clyde". It wasn't to be, though: not for nothing did Rolling Stone magazine once describe Luna as "the best band in the world that no one has ever heard of", a nice poster-quote that, none the less, clearly encapsulated a kind of commitment to a career in cultdom.

In terms of strike-rate, though, the standards of Wareham's songcraft never dropped. The opening track at Luna's final London show, "Malibu Love Nest", comes from their latest and last album, Rendezvous, and it's as breezily good as anything they've done, sounding not unlike Pulp's "Babies" as if covered by Lou Reed. As Wareham's loose, languid melodies and playful lyrics unfurl delicately over the glassy chug and chime of his and Sean Eden's cool guitar-playing, you wonder how this music could have been missed by a wider audience than the type of music fan - think journalists, record-store types, pure obsessives - who took them to heart.

In its mix of melody, detail and atmosphere, it's largely immaculate. Luna's template was set early in their career, on tracks such as "Bewitched" and "Chinatown", both played tonight, both sounding as warm and woozy as the night they were born, and both capturing the band's Lost in Translation-ish flavour from their opening lines. "In the tiny, tiny hours/ between the evening and the day" is the setting, as "Chinatown" has it; "All of a sudden, the girl of my dreams" the subject, as in "Bewitched" (and the girl usually appears from the haze of an after-hours New York moment).

Of the minor changes along the way, album number four, Pup Tent, was perhaps darker than its predecessors; number five, The Days of Our Nights, more reflective; and Romantica and Rendezvous maybe more lovey-dovey. Mostly, though, it was in honing their sound until it seemed like a world unto itself that Luna excelled. Tellingly, tonight's second encore sees Wareham singing "We will never change" on a cover of the Beat Happening's "Indian Summer". Being too cool to change colours may have kept Luna a secret, but all credit to them for sticking to their guns. If they ever "come back for an Indian summer", as the song has it, they'll be welcome.