The OP asked:
This question comes from a discussion on another forum regarding the right approach to doing a cover version. I know it depends on your purposes so the question isn't how best to cover a song, the question is what do you prefer to hear: a faithful cover, well performed and true to the original arrangement or a different interpretation that works well?
Note that the OP didn't specifiy live or recording. He just said "doing".
I have recorded ten CDs of my own original material. This material consists of songs I have written over many years, and which, since the advent of home digital recording, I have been able to fashion into a semblance of listenable acceptability. I've posted a few examples here and there.
Over the last five or so years, I've recorded hardly any orignal material, other than for the occasional songwriting challenge in this forum.
However, I have a couple of musical friends, and we get together as The Defibrillators to record, but just for the sake of recording; we do not play live anywhere . . . we're too old and tired for that. But in the Defibrillators we do nothing but covers.
When doing these covers, we set ourselves a number of challenges . .
1 We try to pick songs that are not so well known or that have not been already covered out of existence. For example, we covered Procul Harum's "Homburg", rather than "Whiter Shade of Pale".
2 Sometimes we set out to see how close we can achieve what the original artist achieved. So our cover of Emerson, Lake and Palmer's "Heart on Ice" is as close to the original as we could manage.
3 Sometimes we set out to create a cover that is deliberately and very different to the original (for example, we do a reggae version of The Bangles' "Manic Monday", and an almost arabic version of Cohen's "First we take Manhattan").
In the case of trying to recreate the sound and intent of the orignal, the creativity comes from figuring out how we can, with the resources we have, come up with similar sounds. In the case of doing something unusual with the cover, the creativity comes from retaining the intent of the song (specially the lyrics) within a different musical interpretation. For us (and me particularly), the creativity of replication or interpretation is as satisfying as the creativity of composition.