Don't Fear The Reaper--Alana Davis.  Originally by Blue Oyster Cult.  
http://www.youtube.com/watch?v=EbJq5lqBdCA
 

Favourites change with the wind but here are a few nominations.
 
Nazareth - This Flight Tonight  - Original Joni Mitchell.
Sandy Denny For the Shame of Doing Wrong - original Richard Thompson
Yes - America - original Simon and Garfunkel
The Nice - Hang on to A Dream - original Tim Harding.

I like Susanna Hoffs and Matthew Sweet's (as Sid and Susie)  "Under the Covers" albums.
 
Here doing the Stone Pony's "Different Drum"

Meet Me On The Corner--Henry Gross.  Original by Lindisfarne.  
http://www.youtube.com/watch?v=htWTkZcOU0Y
 
 

Perfect Day--Kirsty MacColl & Evan Dando.  Original by Lou Reed.  
http://www.youtube.com/watch?v=rhdQzq9cNvA
 
 
 

Family Man--Hall & Oates.  Original by Mike Oldfield.  
http://www.youtube.com/watch?v=YKvJ7bvNxfY
 

There are so many so good cover versions it's hard to pick one, or two...or ten.
 
Nazareths version of "Love hurts" really makes you believe it hurts.
Joan Osbournes version of Dylans "Man in the long black coat" is also good.
(I miss Joan Osbourne, I love her voice. Haven't heard of her for years, the last sign of life I noticed was her
performance in the film  "In the shadow of Motown")
For some reason those popped in my mind first.

yorolpal
...
One of those things was to post this thread seeking to ascertain what your absolute favorite "cover tune" is and who did it.
...
What's yours??

The Clams -- doing the Carpenters song! CLASSIC
 
Roger Ruskin Spear -- Pinball Wizard!  Way better than the original from the album "Unusual"

Jeff M.
Going back a few years...
 

No way ... you need to spend a few ears on "Spirit" from his Grinding Stone album! Now, THAT is a solo that Strummy loves but Mosh is the only one that "knows" it. The best rock guitar solo EVAHHHHHHH ...

All Along the Watchtower by Hendrix is probably THE ultimate cover version of a song for me. Though Sleepwalk by Brian Stezer probably is my ultimate song whatsoever.
 
Some other favorites:
 
New York Groove by Ace Frehley 

Cross-Eyed Mary by Iron Maiden