Oops - sorry about the double post...As a molecular geneticist, I feel I have to remind everyone that the process of natural selection, be it of critters or folk songs, does not imply that changes are necessarily better. Mutation is usually a random process; the results are frequently non-advantageous and sometimes lethal. Only a small percentage of mutations are actually improvements on the original which lead to greater survivability; many more are alterations which are less viable.
Whether you inadvertantly change words because you mis-remember them or deliberately change them because you think yours are "better", the selection advantage of your variant of the song won't be apparant in our lifetimes.
I think that folks who want to
perform
other people's material (as opposed to just sitting around swapping songs with friends) have an obligation to learn the song backwards and forwards, practicing until they can deliver it comfortably in their own voice rather than just mimicking the version they learned. It's a matter of respect; for the material, for the author, and most of all for your audience. If you don't like the song well enough to do it well, why bother learning it at all?