When Chubby Checker, Gary US Bonds, Tina Turner, and Ronnie Spector Charted in the 80's Oldies radio didn't play them. Having said that , some oldies stations do play a few things from "Grease". And occasionally they will play on a one-time basis a few current covers example Cliff Richard - "Daddy's Home", Honey dippers - "Sea Of Love" etc.
Some Classic Country Stations will play current covers of classic hits because they happen so frequently..Alan Jackson - "Pop a Top", Rodney Crowell - "Above and Beyond", Ricky Van Shelton -Statue of a Fool, George Strait -Honky Tonkin', and country covers are usually very true to the original arrangement...Classic Rock covers usually have a little modern sound to the arrangement..Lenny Kravitz -American Woman, Pearl Jam - Last Kiss
I listen to some Classic Rock, and I don't recall hearing new music by a core artist, they might give things like "Smooth" a spin or two because It was such a monster and Carlos is an Icon. And since the song is from 1999, it may be approaching Classic Hit Age??
A/C -Standards Stations will play every cover that hits the stands..Buble, Connick, Rod Stewart,
KD Lang, Rene Olstead and that works really great for me. And they will play some current material by core artists.
With the exception of Classic Country and Standards Stations.., My personal taste, I would prefer not to hear current music by core artists, thats what CHR radio is for...and the biggest reason that I truly enjoy Country Classic covers, is what I mentioned earlier they are true to the original arrangement, it's like discovering digital re-masters of old 78's....