I've been interested in finding out more about this subject too. I happened to have a 1999 copy of the United States Code Title 17 which covers copyrights. Like any book of statutes, reading the United States Code is like trying to read a Russian novel -- in Russian, that is, when you don't know Russian.
Anyway, from what I gather from my reading, and to answer the original question, once a recording of a song has been distributed to the public, anyone can obtain what is called a "compulsory license" from the owner of the copyright of the song.
The compulsory license allows the licensee to record the song and distribute recordings of the song as long as certain things are done according to the copyright laws.
For example, to get the compulsory license, you must serve notice on the copyright owner of your intent to record the song either before it is recorded or within 30 days after it is recorded. The name and contact info for the copyright owner must be registered with the Copyright Office. If not, you can file your notice of intent with the Copyright Office.
Also, you can record the song in accordance with your own style or interpretation, but you cannot change the basic melody or fundamental character of the song.
You must also pay royalties to the copyright owner. The royalty rate is set by the Copyright Office and is periodically revised, so the rate in my copy of Title 17 might not be correct. But anyway, here's what it was as of 1999 at least:
For each song on a recording, the royalty is either: 2.75 cents OR 0.5 cents per minute of playing time or fraction thereof -- which ever is greater. (So, apparently, any song up to and including 5 and a-half minutes long is 2.75 cents per recording. Any song longer than 5 and a-half minutes is 0.5 cents per minute).
As an alternative to the statutory royalty rates, copyright owners and licensees can negotiate and agree upon royalty rates. And, copyright owners can designate agents to negotiate and receive royalty payments.
Statutory royalty payments must be made on or before the 20th day of the month for all distributions of any recordings during the preceeding month. Each payment apparently must be certified under oath in accordance with rules set forth by the Copyright Office.
So, apparently, for example, if you want to record an album of, say, 10 songs that are all copyrighted (not in the public domain), you should serve notice on all the copyright owners of the songs not more than 30 days after you record the songs.
Then, keep records of how many recordings you distribute each month. Then, pay the statutory royalty payments on or before the 20th of the next month.
So, considering your album of 10 songs, if each song is less than 5 and a-half minutes long, then the royalties you would owe are 2.75 cents per song times 10 songs per album times the number of albums distributed per month.
So, if you distributed 100 albums per month, then you would owe $27.50 in royalties for that month -- according to my calculations.
Or, you could negotiate and agree upon an alternative royalty scheme with one of those agents that are mentioned above in some of the previous posts. In any case, don't take my word for it -- read up on it, cuz I might be wrong.
By the way, you can also obain a copyright in the album you make, even thought you didn't write any of the songs -- that's the sound recording copyright. That's different from the copyright in the song itself.
Songs in the public domain (such as traditional songs) are not subject to copyright laws. However, sound recordings of public domain songs can be copyrighted. So, for example, if you want to record a version of "I am a Pilgrim" do it your own way instead of copying Merle Travis' version because whoever owns the copyright to any of Travis' recordings might say you're infringing on the copyright of Travis' recordings, unless you obtain a compulsory license and pay royalties, that is.

<FONT SIZE=1 COLOR="#8e236b"><p align=CENTER>[This message was edited by Tom Olson on 31 July 2003 at 11:21 PM.]</p></FONT>