Does IS help with slow moving subjects?

Absolutely yes. I regularly shoot photos of people at dinner parties (unposed) at 1/8 second. My main reason for shooting Sony is so that I can have both stabilization and a wide aperture lens. As with anything in photography, it takes practice to do well. A couple of pointers:

1. You need to practice to capture the moment when folks are still. This is easy to do at a dinner party (people spend a lot of time pretty static when they're not talking) but possible in other contexts as well. One of my best shots was from a aerial acrobatics performance. I was able to capture a moment when the acrobat was switching directions (high acceleration, but zero velocity). The acrobats thought that my amateur photograph from the audience was better than any of the photos they had gotten from professionals. Due to the mood, in that scene, there was almost no light, and the light that was there was somewhat unusual. Flash would have spoiled the feel of the performance. It would have been impossible without f/1.8 and IS. 
2. Not all motion blur is undesirable. In some cases, it can be used to show action. Pay attention to what people are doing and where the blur is beneficial, where it is acceptable, and where it is undesirable. 
3. As you're shooting, if the subject is e.g. moving or dancing, you do need to pan with the subject. This is important without IS, but even more so with.