The hands down best for me is Hurt by Johnny Cash.
I've got a huge list of Pearl Jam favorites and I'm not sure where to begin. I'll just list Crazy Mary, Sonic Reducer and Throw Your Arms Around me to start.
For me the worst by far is when Puff Daddy and Jimmy Page redid Khasmir. They renamed it Come with Me (heh heh Beavis they said come with me) so maybe it doesn't count, but I remember them doing it on SNL or some late night show and wanting to break my TV. How can someone take their own song and do that to it?
I had an old Pearl Jam bootleg that had some awesome covers on it. For all you digital yunguns, bootlegs were CDs that were near impossible to find that cost a crapload of money back in the day. Anyhow, it included covers of "Light My Fire" and "Break on Through" by the Doors, "Baba O'Rielly" and "The Kids Are Alright" by the Who, and "Dock of the Bay" by Otis Redding. All were pretty stellar. I believe some of the same versions may have been rereleased on the Lost Dogs CD.
I hate Hurt by Johnny Cash.
NIN's is one of my favorite song and I think Cash ruined the emotion of the song. Just my opinion.
Good thing Trent Reznor's opinion matters more on the subject than yours [ame=http://www.youtube.com/watch?v=GlzjqPGdOSM]Johnny Cash - Hurt (Commentary by Trent Reznor) - YouTube[/ame]