I love to hear it when it works, like with the Fugees cover. But when it doesn't work (as with a lot of covers by quasi-Celtic rockers, Tempest) it just sets my teeth on edge.
Not every traditional song can be made contemporary in a different genre. IMO, it takes very gifted musicians to pull it off well, and even then, they often fall short of the mark.
Its those moments when it is purely dead brilliant, as with the Fugee's "Killing Me Softly" that it really works.
What I think is odd, is how few traditional folk musicians from the Anglo, Celtic, and Anglo American music genres have been able to do cross-over by covering music from other genres. They seem much more comfortable trying to make their own music sound contemporary, rather than experiment with songs from other music genres.
Why is that, do you suppose?