Sake, I hold most professional classical guitarists in very high esteem, but this does not mean that I don’t think of them as a cover band as your friend mentioned. It should be noted that many composers who have written for the guitar (especially in this century) were not able to play the instrument, and if they were able, only to play rudimentary guitar (ie basic chords/bar chords). They saw a potential that they could not actually achieve and wrote to that potential. When I write classical music, I write for all instruments, yet on many of the instruments I only know the rudiments. (For example, I wrote an organ piece but did not really know how the stops worked. I went in with an organist and had her explain them to me while playing excerpts so I could obtain the sound I desired.) In the instance of the classical world, the composer is the inspiration and the writer of the music, but rarely is he also the performer. This is not 100% true, but it occurs often enough to be the primary source of the given pieces performance. I think my interpretation is more equivalent to a semantic argument. It is more moderate than either of yours or your friend’s (Jason) view.
I should mention that one of my primary Music History teacher, Sister Goretti (PHD) holds a similar view to yours. She believes that a composer is the single most important musician with all of the performers being a relatively minor input. Historically speaking this is mostly true. In the history books such as the Groves dictionary (around 20 volumes), Grout, or even LaRousse, they focus primarily on the composers and their music with relatively few performers mentioned. Those performers that are mentioned were one of the following: also a composer (Bach, Mozart, most of the other big names), a virtuoso performer who revolutionized the given instrument (Vladimir Horowitz, piano), and/or had significant impact on other composers (Segovia, guitar,DUH!).
I believe good performers puts in a significant amount of input on most music that puts them above a typical rock cover band, but not nearly as much as the composer. As a person who currently does both, I have to say that composing is significantly more difficult and time consuming than performing a piece. It is also more nerve racking hear a piece being performed the first time rather than simply performing a given piece. I have had my own pieces played and had interpretations up the wazoo that gave my pieces a significantly different sound than originally envisioned. On the guitar effects can be achieved by playing dolce (over the neck) and pizzacatto(closer to the bridge) rather than in the normal position (around the sound hole). If a performer is good and uses judgement, these type of effects can drastically change the demeanor of the piece and even make a mediocre piece quite interesting and challenging.
Phaedrus, First off, if you are looking for Kannengeiser, I would suggest Echoes of the Old World, particularly for the Koyunbaba Suite by Carlo Dominiconi. He is also a member of the LA Guitar Quartet which is quite fabulous as well. He is one of the modern Italian composers and manages to write things that are very interesting. I played this piece as a student (the first two movements) and it was great fun. If you can get over the unusual tuning it is really fairly easy to play. It took a while in the reading to not be disturbed by seeing a different note than was actually played. (It tunes the guitar’s open strings to a c# minor chord (or d minor if you use the alternate tuning).
Gasper Sanz’s Canarios is an interesting piece. I have played a couple versions but the Bream version is also one of my favorites. If you can find the original manuscript, you can actually make your own version. If I remember correctly, it was originally written for the vihuela (a precursor to the modern guitar) and Williams’s interpretation would be more accurate than Bream’s version. A subjective ear, I feel as is always the case with music, makes the Bream version shine more, in my opinion.
I am very surprised that Bream had so many mistakes and flubs in his performance. I should mention that I rarely go to see guitar performances because all my training as a guitarist makes me notice their mistakes more than the actual music. It makes me significantly more critical of the given performers mistakes than I would otherwise be accustomed to make. When I go out to see music, I will probably go to a symphony, a chamber concert (particularly piano or other small ensembles), or to a folk concert. I am still critical of the guitarists ability at folk concerts, but the stories that the musicians tell usually make staying worthwhile.
You mention Williams’s attempt at a rock band. I don’t know what he was thinking, but I suspect that he was trying to have fun with it (not that he needs money anymore). Rock music is significantly easier to play as you are well aware as having played at least a little bit of classical repertoire (I suspect that you play significanly more than you say in your posting). Rock music is something that most trained musicians can pop out and have memorized in about 15-20 minutes; whereas, classical music usually takes several hours to memorize, depending on how long the piece is, and even more time to perfect the interpretation. I once played in a variety of folk, jazz, punk, hard core, and grind core bands. I learned all of the music (either music I wrote myself or music that another member wrote) within twenty minutes and had it performance ready shortly after that. The discrepancy in learning classical music compared to the more pop styled music is very great indeed. I should mention that jazz music usually took longer to interpret, but the memorization depended on what style I played in jazz (ie, if I played the piece as an extended chord solo). The chord solos took longer to memorize than just the chords, but having a melody with words made it even easier since they provided an extremely facile mnemonic device.
Also mentioned was the fact that Bream played from music. In the overall classical world, this is fine. The recent guitar movement has started to get away with this because Aaron Shearer (retired pedagogue last taught at Peabody Conservatory) developed a Solfege method that made memorization easier. I was not trained in this method, unfortunately, but am now teaching myself the method and find that it makes the pieces easier to memorize. In order to begin learning pieces in this manner you need to be able to read music easily in the first position. His original method had “real music” (by past composers) and was more interesting and the current version has music that he has written himself (it really sucks). The first version is out of print, but if you luck out and find it get an extra copy and I will pay you for it. 
His methods are published by Mel Bay and should be readily available. To give you an idea of what his current method’s music is like would not begin to describe the monotony of it. It is actually more boring (albeit a little more challenging) than Mel Bay book one. BLECH!
Well, my $0.02
HUGS!
Sqrl
Gasoline: As an accompaniement to cereal it made a refreshing change. Glen Baxter
Also what was that business with “Sky”? That idiotic rock band thing he tried, was he on acid?