I think the best covers give a different spin on the original, almost creating a new song eg:-
Joe Cocker - a little help from my friends
sinead o'connor - nothing compares 2 u
the Byrds - (just name any song!)
This is what the scissor sisters have done, I think it is good in a 'new song' way, but cannot be compared to the original which is simply sublime.
I've not heared the live 8 collaboration rumour, but it doesn't sound good.