Prong paid the price for being too ahead of their time, thus seeing disappointing album sales and their contract getting yanked. Tommy Victor disbanded the album after Epic dropped them, although Ted Parsons and Paul Raven wanted to try to get a new deal somewhere else. Tommy then toured with Danzig, while Ted, and later Paul, joined Godflesh (which disbanded last year). While Ted and Paul were doing Godflesh, Tommy ressurrected Prong with three new guys, toured, and are now looking for a record deal. He released a live album last year, but it’s not great. Chances are not good that Ted or Paul will get back together with Tommy. Thus endeth this recitation from the book of Prong.
beastie boys and run dmc? give me a break, i think their talents have long been recognized…maybe i misunderstood you, but neither band is underrated…
Bear in mind, I’m an old fart facing 40 in a couple of years but, I’ll take a stab at this.
The Faces- THE best drinkin’, feelin’ good English sloppy rock and roll band, bar none. Had a sense of humor about themselves but also had a sensitive, mature side that was out of this world for being so young. Ronnie Lane was their secret weapon. RIP.
Frank Marino and Mahogany Rush- Excellent power trio outta Canada who had a small bit of exposure in the late 70’s. Frank’s reputation as the “kid who overdosed on LSD and absorbed the ghost of Hendrix” truly hurt him. He was SO much more than that nonsense. As musicians, they were brilliant. Frank had more talent in his little finger (which by the way, he didn’t typically use on the fretboard which is ASTOUNDING if you ever heard him play) than most of the other recognized guitar players back in the day. If you have never heard of Mahogany Rush, I strongly urge any blues rock fans to go out and get “LIVE” as soon as possible.
Caroline’s Spine. I know they have a regional following, but they have not achieved the national recognition that I think they deserve. The song Wallflower in particular is beautiful .
**thirdshiftgrottoslack **, I could not have described my love of Son Volt any better. They are by far the best rock band of the last 20 years. Alas, do not give Jay Farrar all the credit - All of those guys (especially the Boquists) are exceptional musicians.
Farrar is an incredible songwriter and has one of the coolest, most distinctive voices since Johnny Cash, but he needs to be surrounded by great musicians to truly shine. His solo album “Sebastopol” is proof of this. He basically got rid of good musicians and replaced them with shitty ones because his ego desired his name on the cover of the album. 
Anyway, Son Volt isn’t really underrated; they’re just not widely known. Everyone who knows who they are seems to like them (rightfully so) and gives them the credit they deserve.
Three bands that were definitely influential but didn’t have the commercial success that those they influenced obtained (and therefore could be deemed underrated):
Fishbone: Ska, punk, soul, funk, hardcore, they played many different styles of music well. They influenced bands of many different genres, but none have come close to emulating their combination of diverse styles. Unfortunately, they had many internal problems over the years, preventing them from maintaining a cohesive unit and profiting from the punk and ska fads of the 90s. My favorite album: Truth and Soul.
Husker Du: Their early stuff was a precursor to hardcore, their later stuff was pre-grunge, but at the time the only available label for them was “punk”. They wrote great songs, were incredibly prolific in an era of one-album-every-two-or-three-years, and were technically very talented for a “punk” band (especially guitarist Bob Mould), but they broke up before listening to “alternative” music was cool and before Nirvana appeared on MTV. My favorite album: New Day Rising.
Bad Brains: They started out playing reggae and punk (and even very early on jazz), then later moved onto heavy metal, opting for dreadlocks and rastafarianism instead of big hair and groupies. They influenced many artists in many styles of music, from 311 to Sublime to No Doubt to Moby. I remember seeing them open for Living Colour (guitarist Vernon Reid was supposedly a big fan of Bad Brains’ Dr. Know) at Irving Plaza, and after the Bad Brains set ended, a significant portion of the audience left. My favorite album: I Against I.
Before I went to college (and thereby losing access to my older brother’s CD collection) the two albums I bought for my new life on campus were Truth and Soul and I Against I. The first album I bought when at college? New Day Rising. Gotta give thanks to my bro for hooking me onto some great music 
I should note, however, that Spin magazine ranked both Husker Du and Bad Brains as among the the top 50 most influential rock bands ever last year, so they may not necessarily be considered “underrated”.
One last band, not necessarily hugely influential (although one of my favorite bands, Less Than Jake, was supposedly heavily influenced), is Snuff. After the punk fad of the 90s tons of punk bands popped up, old punk bands reformed, etc., and even after the fad faded indie labels have kept the punk albums in the stores, but Snuff never seems to get any notice, at least in America. They’re English, but I don’t know how well they do there. I do think that they’re big in Japan, but I can’t verify that. They play melodic, poppy punk and hardcore, and feature the unique combination of a singing drummer, guitarist, bassist, organist, and trombonist (and most recently added a saxophonist, I believe). They just released a new album, Disposable Income, in the UK, and it should be coming out in the US in March, but my favorite Snuff album is Demmamussabebonk.
Concrete Blonde
Everyone says “Oh, yeah. ‘Joey’” but there is so much more (and better)
Apoptygma Berzerk
VNV Nation
Nick Cave
Siouxsie & the Banshees
I second (or third, or fourth) the nominations for:
Depeche Mode
PJ Harvey
Portishead
Fishbone
Helmet
And will throw in:
**The Reverend Horton Heat **-- punk-a-billy at its finest. I’ve seen them at least three times and they never fail to kick ass and make the audience want to jump around, dance, mosh… whatever works. In fact, the first time I saw them, they opened for Soundgarden and made them sound like amateurs. (Except for Chris Cornell’s voice, which just stands out no matter who he’s playing with.)
Prince – Really stands out as one of the finest modern musicians I’ve had the pleasure of listening to. Generally panned by critics, the good stuff rarely gets airplay.
Tool – I really don’t understand why they aren’t more popular than they are.
**New Order **-- Even though I should probably be crediting **Peter Murphy **and Joy Division as the major pre-techno influences, there will always be a special place in my heart for New Order. Never heard an album I didn’t love and play to death.
Sugar – Bob Mould’s more recent project. Outstanding.
I realize that was a bizarre mix of genres. You guys must think I’m schizophrenic!
bad brains playing heavy metal? please tell me what album because i havent heard…as far as opting for dreads and rastafari, are you talking late seventies beacuse from what i know about them thats when hr began to grow his dreads…i’ve seen them a few times as well, luckily before every college kid around heard of them and at a small club indeed…they were 4 hours late and played an incredible set until the early morning hours…