The Eternal Playlist

I think Midge Ur's version of Man Who Sold the World is better, but it's a bit quibbly if that really counts as original artist David Bowie contributed to it.

Edit: MSI's cover of Supertramp's Logical Song song is a pretty good cover if you like MSI and not Supertramp. Similarly with their cover of Tom Sawyer and Rush respectively.

David Byrne covers Crystal Water's Gypsy Woman. I'm not sure it's a better cover, but it is unique in that I don't know any other cover of a dance track into not a dance track.

Jimi Hendrix's version of All Along the Watchtower absolutely blows away the original.

I love covers in general. There isn't one that springs to mind as "better than the original" because I just like hearing a new take an something that's already out there. The "punk goes" albums come to mind as some that are in the rotation frequently.

Painkiller by Death, No Remorse by Cannibal Corpse, what else... Dezperadoz' version of Riders in the Sky is exceptional