Covers that are arguably better than the originals:

I love 'this flight tonight' by Nazareth. It was years and years before I realised, accidentally, that it was a cover!

I had bought a copy of Joni Mitchell's Blue at a second hand record store, not having it my collection. I played it and had a double take when the original popped up. I knew immediatley that it must predate the Nazareth version.
 
Manfred Mann's Earth Band did many Bruce Springsteen and Bob Dylan covers that - arguably - are better than the originals. But Bob Dylan covers yet have been covered in #372 ;).
Btw, Bob Dylan's vocal capabilities appear to have improved much form the moment on he decided to record and perform with a full background band and go electric. Does anyone know covers form this aera that indeed are better than his originals? I don't. No, the Guns And Roses version of Knocking… surely isn't
:p.
Best regards!
 
Manfred Mann's Earth Band did many Bruce Springsteen and Bob Dylan covers that - arguably - are better than the originals.
Is that why the Boss was furious about the MM's covers? Personally I'm siding with Bruce, I thought Manfred's versions were not even in the same ballpark. The three from Greetings from Asbury Park were so badly butchered they're not even close to the same song.
He should have stuck with Doo Wah Diddy Diddy. :)