The Donnas' cover of Too Fast For Love is pretty funny.
I really dig The Happy Mondays' version of Step On, though I don't remember who did the original version.
My band (plug) just recorded a cover of Cry, Baby, Cry by The Beatles... I'm inclined to think it's good.
Thraeryn was right with Type O's cover of Cinnamon Girl by Neil Young. It's fabulous.