I understand that in the US, there is a compulsory licence that must be granted by music publishers once a work has been commercially exploited the first time, that allows anyone to make a cover version of the song. There's a nationally-set rate (9.1¢/minute, I think) that can be collected for mechanical copies, and the collecting Performance Rights Organisations can deal with live performance.
Firstly, what's the legal situation in, particularly, the UK and Australia for performing and recording covers? I know a lot of groups do different things here, but pointers to the actual regulations would be good.
Secondly, when does a cover become an adaptation in these jurisdictions? Some covers seem to be very different from the original song, to the point where they would be considered different, derivative, works (and thus require permission for the new version, rather than working through the collection PRO).