I'll second Zupfgeigenhansel's beautiful album of Yiddish songs and Ougenweide. I haven't often heard German traditional music performed other than at medieval markets. Hannes Waader is a good singer and player, but for my taste he does a lot of stuff which is little more than translated Irish Pub sets. Most of the "folk music" on German TV is completely fake. It's basically custom written "Germany for tourists" junk with the credibility level of "Dallas". However, that issue has already been done to death on previous threads, which also contain some excellent input from Susanne and Wolfgang. They both know more about UK folk than I do - let alone German music! So I am going to tread softly on this thread! My own favourite singer here is the very volatile but brilliant Klaus der Geiger, whom I have mentioned before. He is in his sixties now, but he barks out his words (which are often very funny) while simultaneously playing the most extraordinary fiddle that you have ever heard. If you speak some German and fancy looking up his site, I believe it is:www.klausdergeiger.de
If you want to find out more and you can't get through, PM me and I'll send you a link.