and you are now playing with the guys and going fine. Until you come to a song you have never played. The guitar player calls out the song is in, lets say C. How do you go about figuring which chords to use.
If he just said C, he means C Major, so until there is a chord change in the progression (which they should also call out) you should be safe playing any note in the C Major scale. In reality for the entire song you will probably be fine with that as well, and especially if you stick to CMaj Pentatonic, unless the actual key of the song changes.
To keep it simple at first bouncing between C and G is a good safe call.
Where are you in the course? Josh covers chord progressions pretty well.