I really like covers, personally.
Sometimes hearing a song through another artist's interpretation can make you hear the genius of the original.
One of my favorites is John Mayer's cover of Kid A...kickass.
But a lot of times, covers just bring a little nostalgic fun to the listeners...don't a lot of bands do covers in concert? I think building your whole album around a half-assed cover is kind of lame, but as bonus materials or what-not, covers can be a lot of fun.
I had an idea for a mix CD full of covers...all linked.
For example, let's say it starts off with John Mayer's Radiohead cover...the next track is Radiohead covering U2 or whoever, then U2...etc...ending with the final band covering John Mayer.
Kind of like six degrees of separation.