Personally, I am a huge fan of hearing how bands honour other bands/musicians work by doing cover versions - of course there are times when it all goes horribly wrong (think Avril Lavigne covering a Metallica track for their MTV ICON performance)!!!!
Some of my faves tho have to be;
Skid Row - Little Wing (Jimi Hendrix) - superb job here, beautifully done!
Metallica - Stone Cold Crazy (Queen) and So What (Anti Nowhere League)
Guns N Rose - Live And Let Die (Paul McCartney)
Pantera - Planet Caravan (Black Sabbath)
Dream Theater - Dark Side of the Moon - whole album! (Pink Floyd)
Metallica actually did a cover of Hendrix's "Little Wing" during the Seattle 89 concert (from the Live Sh*t Binge & Purge box set) included in Kirks guitar solo. It was done with no vocals, but it was really very good - you can see and hear a LOT of Hendrix in Hammet's playing, and his interpretation of it was superb

Likewise, they also did a take on Deep Purples "Misunderstood" from the San Diego concert (same video box set) which was also very good, albeit shortened.....