In comments on Chad's post that I mentioned below, commenters started, um, commenting on the difference in reception of Aretha Franklin's "Respect" from Otis Redding's original, or the horrible thought of Eddie Vedder singing "Hit me baby, one more time." This brings to mind an article in the latest issue of Music Theory Online. Lori Burns and Alyssa Woods write about Eminem's "97 Bonnie and Clyde" in his version and as covered by Tori Amos (and Amos' cover of "Strange Fruit" compared to Billie Holliday's version). I saw this paper at the 2003 SMT conference, but wasn't impressed with Amos' covers. In the Eminem piece, which is about a guy who murders his wife while his young daughter watches, the authors claim (based on Amos' statements) that Amos takes on the voice of the murdered woman. The words are not changed at all, so Amos is still narrating from the man's perspective. The only change is that Amos speaks the words with a hushed voice (heavily amplified), with a slight ambient noise suggestion of being enclosed. While I'm a big fan of performances that focus on timbre and subtle changes in sound color, I just don't hear it as meaningful or artistic in Amos' case. Perhaps someone with more familiarity with her work can educate me.
In any case, the article does lay out some interesting theories regarding how the status of different performers create different impressions of the same songs.