* As a proper noun, referring to the specific band: Yes, you should capitalize "Nirvana." For example: "Nirvana's album 'Nevermind' was a huge success."
* As a common noun, referring to the state of perfect peace: No, you should not capitalize "nirvana." For example: "Some people believe that achieving nirvana is the ultimate goal in life."
In short, if you're referring to the band, capitalize it. If you're referring to the concept of perfect peace, don't capitalize it.