From the musicians standpoint, I would prefer to hear an interpretation of a cover song. Either along the same style as the original, or even better to take a song into a completely different genre and make it yours. To me, that's some great stuff.

However, being in a cover band and talking to many non-musicians before, during breaks and after our gigs, the typical non-musician wants to hear the familiar recorded version. Their perception is that if you don't play it exact, then you're not "as good" as the original artist. If you put your own spin on a solo, then you're covering up for the fact that you didn't learn or somehow can't play the original solo. The typical non-musician wants it done the way they know it or they consider you a hack.

Now there is a percentage of non-musicians who appreciate hearing something that approximates a song they know. I've seen them whoop up a storm for other local cover bands that are trying to play a song and failing miserably. Fans can be strange like that. The drunker the crowd, the better the band sounds.

As unpredictable as audiences can be, musicians can be just as flakey. I know some musicians that refuse to play a song if it isn't note for note perfect. I also know some who refuse to play covers because "they're boring". I know some who seem to make up chord progressions on the fly while adding the lyrics from some cover tune, then claim it's their own rendition - except the next time you hear them play the song, they play it completely differently. I know some musicians who could play on any random guitar/rig and be amazing, and others that have to change guitars/rigs each song just to get "that perfect sound".

So who's right and who's wrong? Who knows? It seems to boil down to whatever floats your boat (musician or audience member), and if it's goof, it's goof.