Many bands cover songs by other bands, unofficially at concerts, or usually on live recordings (for example, [Kurt doing Man Who Sold the World](http://www.youtube.com/watch?v=fregObNcHC8) by David Bowie, at an MTV unplugged concert.

I always thought it was a form of "bigging up" the other band. The other band being covered is probably complimented by the "free promo" they get by having their song re-done by another set of hands. But, perhaps there is more to it. Perhaps there *is* money changing hands for the privilege to cover a song.

Is it so? Or do most people just perform the cover without permission from the original artist/estate?

Looking for a practical what actually happens answer, not "legal advice" or what a "should happen" answer.