Thanks for the correction. And thanks for knowing what I was trying to say. I used to own that CD, so there’s no reason why I should have that title wrong.
David Crosby back up Phil Collins on “Another Day in Paradise”
Paul McCartney co-wrote and played bass on Elvis Costello’s “Veronica”.
Daryl Hall sang backup on INXS’ “Original Sin”.
Steve Winwood played keyboards and sang backup on Billy Joel’s “Getting Closer”
Phil Collins was EVERYWHERE in the 80s, including producing, backup vocals, and drums on the reissue of Howard Jones’ “No One Is to Blame”
Dave Matthews Band, Spin Doctors, & Blues Traveler all did stuff on each others’ records in the '90s.
Which, of course, leads to Billy Joel having Cyndi Lauper sing backup on “Code of Silence,” from the same album.
And Joel sang back-up on Lauper’s “Maybe He’ll Know,” off of her True Colors album.
And Billy Joel had Color Me Badd sing backup on “All About Soul,” from River of Dreams
Sheryl Crow began her career as a backup singer for Michael Jackson on his Bad World Tour in '87 and did backup for Stevie Wonder, Don Henley and Belinda Carlisle among others.
According to his wikipedia entry, actor Stephen Tobolowsky (Ned Ryerson in Groundhog Day), was a back-up singer and guitarist in the first band formed by Stevie Ray and Jimmy Vaughn.
Not quite a back-up singer, but Stevie Ray Vaughan played lead guitar on David Bowie’s “Let’s Dance” album.
Trying to think of all the songs Prince has guested on - just assume he sang with everyone he worked with?
On Cheech and Chong’s “Basketball Jones” there are several famous backup singers, musicians, etc.:
Darlene Love - Cheerleader (voice)
Michelle Phillips - Cheerleader (voice)
Ronnie Spector - Cheerleader (voice)
George Harrison - lead guitar
Klaus Voormann - bass
Jim Karstein - drums
Jim Keltner - percussion
Carole King - electric piano
Nicky Hopkins - piano
Tom Scott - saxophone
Billy Preston - organ
McCartney was in the Beatles, for Pete’s sake. If that counts, there’s about a million more. I hear John sang back-up on I Saw Her Standing There, too. 
I’m admittedly not the world’s biggest Beatles fan, but the song was played on the radio the other day, and the DJ attributed it to Lennon himself, not the Beatles. Since Yoko is widely considered one of the main reasons the Beatles broke up (and I’m not saying that she is or is not responsible), I wasn’t sure exactly where in the “life” of the band the song came from.
No worries, just poking fun. That song was a bona fide Beatles song, FWIW.
“Weird Al” Yankovic sings back-up on Ben Folds’ album Songs for Silverman, specifically on the song “Time.”
And I gotcha, Strat. Thanks for the heads-up.
Taj Mahal did the background grunts (and guitar) in Michelle Schocked’s “Jump Jim Crow” on the brilliant Arkansas Traveler.
On the album Stay Awake, 'Little April Showers" was a duet between Michael Stipe and Natalie Merchant–with background vocals by the Roches!
On Brent Spiner’s novelty album Ol’ Yellow Eyes is Back, on the song “It’s a Sin (to Tell a Lie),” he’s backed up by The Sunspots: LeVar Burton, Michael Dorn, Jonathan Frakes and Patrick Stewart.
Heard one on the radio today, and immediately thought of this thread:
The ever-present Michael McDonald sang backup on Christopher Cross’ “Ride Like the Wind.” (Apologies if someone already mentioned it and I missed that post!)
One of the last Beatles singles, and actually recorded with only Lennon and McCartney present. Certainly it was a John Lennon composition, and he might have released it as a solo single if Paul had passed on it (as he did with “Cold Turkey”), but it was indeed released as a Beatles song.
Geddy Lee of Rush sang the chorus on Bob and Doug McKenzie’s Top 10 hit “Take Off”
Christopher Cross sang backup on David Lee Roth’s cover of “California Girls”
In the category of people singing backup on cover versions of their own compositions:
Ray Davies sang backup on Joan Jett’s cover of “Celluloid Heroes”
Elton John appears on Bob the Builder’s cover of “Crocodile Rock”.
He also appeared in this video by Jennifer Warnes doing a Leonard Cohen song.
Sorry to be so late to this party, but I have one that’s driven me crazy for years that I can’t find attribution for… did Daryl Hall sing backup on Under Pressure (by Queen & Bowie)? I swear I hear him in the “scat” background vocals, but can’t find any source for it.
As an offering, I bring you these tidbits - not necessarily vocals, but interesting (at least to me) none-the-less…
Flea played bass on “You oughta know”, by Alanis Morissette, with Dave Navarro on guitar. (source: Jagged Little Pill - Wikipedia)
Clapton played the lead guitar solo on “While my guitar gently weeps” on the Beatles’ White Album (source:While My Guitar Gently Weeps - Wikipedia)
Save It For A Rainy Day by Stephen Bishop - which is now almost totally forgotten - has Chaka Khan singing in the background, and the (utterly forgettable) guitar solo is played by Eric Clapton!!