Townshend, of The Who and who was the festival's keynote speaker, joined former Faces keyboardist McLagan and his Bump Band at the annual Austin Music Awards for two songs during a tribute set for the late Faces bassist Ronnie Lane.
McLagan released an album last year dedicated to Lane. Townshend and Lane had collaborated on a set called "Rough Mix" in 1977.
They played the "Rough Mix" track "Christy Lied" and the Small Faces hit "What'cha Gonna Do About It," the latter of which featured some inspired soloing by Townshend.
Townshend also used his speech to announce The Method, an interactive Internet service that will allow users to collaborate on customized songs with Townshend and other professional songwriters. The Method is to be launched in April.