Even those who mistakenly believe that music is better live than in studio recordings mostly accept that live albums are, with exceptions, mainly inferior pieces of work, often released for non-artistic or contractual reasons, and usually touched-up in the studio to the point that 'live' is an extremely approximate description.
In those rare exceptions, live albums give a vivid picture of an artist at a particular phase of their career. The bootleg recording is, naturally, an important part of this process, often (though not always) qualitatively inferior in terms of sound, packaging and so forth but just as often superior in performance and atmosphere.
The Smiths present a textbook example of the pitfalls of both official & bootleg live albums: the posthumous Rank (released '88, recorded '86 for Radio 1) is a good, very energetic concert, professionally recorded and then (slightly over) polished by Grant Showbiz, projecting Morrissey's voice forward in the mix at the expense of bass.
Good though it is, the ideal Smiths gig is arguably (I am arguing) not the big rock show with Craig Gannon adding extra width to the trebly guitar onslaught, it's the relatively smaller, earlier shows when the band was just beginning to make its presence felt outside of the indie chart; like Last of the English Roses (aka lots of other things), recorded in 1984 at the Hammersmith Palais when, as Morrissey amusingly points out, 'This Charming Man' was at number 86 in the top 100.
The four-piece Smiths is, necessarily more sparse than that heard on Rank, but the enthusiasm and freshness of the young band, the intimacy of the sound and the concentration on the band's earlier material makes this a preferable live album (which even features guest vocalist Sandie Shaw on a nice version of 'I Don't Owe You Anything'). That said, if Rank suffers from a surfeit of 'production', Last of the English Roses could do with some - the sound is clear and good, but almost bleakly bare and open, and the usual bootleg issues (occasional wobbles of speed, incorrect information on sleeve etc) make this just a tiny bit too vérité for its own good.
Sometimes the live album - as with Rank - is part of an understandable attempt to salvage every little part of a short-lived career. In the case of Otis Redding this is literally the case, but luckily for both the record company and the public, Redding seems never to have performed at much below his unassailable best.
The Smiths and (more tragically) Otis Reddings' lifespans were alas too short for the live album as career milestone, but one band who have officially now been around for at least one live album too many is Kiss.
Their official live albums may be significantly polished post-recording (through necessity; as bootlegs - often better than the official releases - reveal, you can't fly around the stage shooting rockets & breathing fire without missing a few notes), but if one takes the proliferation of Kiss live recordings from 1974 onwards a coherent narrative emerges:
a fun, enthusiastic, tough-sounding young hard rock band trying to make an impact...
They then made it and became a monstrous, fun, polished hard pop-rock band and then became too rich and became a bland, cynical ,commercial hard rock band trying to keep up with the younger generation and then became an overly serious middle-of-the-road rock band with too much belief in their 'classic rock' status and then finally realised they were boring people and became a pantomime version of the monstrous mid-late 70s version of the band with much bigger explosions but less fun.
Like Kiss but with more integrity, Iron Maiden seem very much to subscribe to the 'live album as snapshot of career'.
Fortunately for their true fans but unfortunately for everyone else, the band are such assured performers and so prolific on the live album front that, after the classic Live After Death often the only real progress is that there are a few songs that didn't appear on their previous live album. They are not quite in the Rolling Stones phase (new studio album as taster for upcoming tour) but they are getting there.
Iggy Pop has the same problem almost in reverse; again, so many albums, but of such extreme variations in quality, both performance and recording-wise that purchasing them is something of a minefield.
Daniel Johnston's fairly prolific live output, while being erratic in the extreme, document his progression from wobbly, stage-fright afflicted outsider-figure to revered, but grizzled survivor, losing a little of his unique charm (not to say his singing voice) in the process.
There is also the 'symptomatic' but not good live album; one that gives an entirely accurate picture of the artist's career at a point where that career is in difficulty. David Bowie offers two classic examples; the extremely interesting but audibly zoned-out David Live (1974) in which the artist is captured in the dreggy aftermath of glam, dipping a toe in soul/r'n'b with a good version of 'Knock on Wood' but not yet fully into the Young Americans phase.
Stage, only four years later, shows just how technically good but sterile and pointless a live album can be; Bowie sings well, his band (with the underrated Adrian Belew on guitar) are about as good as a band can be, but somehow the material from possibly his best period, 'Station to Station', 'Low' and 'Heroes' is severely lacking in the drama and darkness that made those albums (especially the first two) so vital. What's left is a strangely sterile experience, in a word FINE.
Ideally what you want is something in between all of these extremes; a few official live albums, marking significant periods, well-played but not lacking in atmosphere and some decent quality bootlegs to fill out the 'warts and all' picture. A good place to start would be with Tom Waits;
Nighthawks at the Diner (1975)
Genuinely live, albeit recorded in a studio with a small audience, Nighthawks (as the Edward Hopper-referencing title suggests) is the apogee of Waits' beatnik/bohemian/jazzy phase, showcasing Waits as witty raconteur and teller of rambling anecdotes. In fact, the album is only seemingly informal - the band is admirably tight and Waits' own performance, warm and amiable, is nevertheless slightly more focussed than on other shows recorded (in more standard venues) in the same period (Round Midnight, also excellent, features some of the same apparently rambling introductions, only less polished). The songs are an excellent bunch of melancholy, atmospheric late-night classics too, and importantly and unusually, were exclusive to this album and not from his previous releases. 'Warm Beer & Cold Women', 'Eggs and Sausage' and 'Puttnam County' are warm, boozy, descriptive (the latter being one of those Waits songs which is essentially a list of 'things') explorations of the margins of American life, influenced by Kerouac as much as by Bob Dylan.
Waits' music underwent a transformation with 1983's Swordfishtrombones, not so much abandoning his slightly romanticised, Bukowski-esque view of life as immersing himself in its characters and giving them a soundtrack as primal, sparse and sometimes archaic as the lives of which he sings. Although it seemed sonically like a major break with the past, live recordings reveal that by the end of the 70s, atmospheric, semi-narrative songs had been stretched out about as far as a traditional band arrangement could let them;
Fast Women and Slow Horses (Australia, 1979)
This superb bootleg is probably the best live recording of Waits' career to date. Like Nighthawks... it presents a good-natured, chatty Waits, this time playing loose versions of songs, mainly from Small Change, Foreign Affairs and Heartattack and Vine, with an excellent band who are skilled enough to follow Waits' flights of fancy, making snippets like Since I Fell For You (and even Silent Night) blend seamlessly with masterful versions of classic songs like 'I Wish I Was In New Orleans' and 'Red Shoes'. Star of the show though is an extended version of the not-bad Foreign Affairs song 'Burma Shave', here turned into a powerful monologue and melded with a superb version of 'Summertime' by saxophonist Herbert Hardesty. Unlike the majority of the music discussed in this post, this version of 'Burma Shave' could only exist on a live album and is vastly superior to the studio version, which sounds underdeveloped by comparison.
Big Time (1988)
Big Time was the live album that summed up what Waits had been doing since he 'went weird' around 1983. It's a snarling, grimy, scary album, theatrical rather than naturalistic as before (as highlighted by post-production fiddling with Waits vocals to make them even gruffer). It's less likeable than earlier live recordings (with some exceptions, see postscript below) but powerful, dramatic and gripping isn't a bad trade-off.
Glitter and Doom Live (2009)
Glitter and Doom redresses the balance between Tom Waits as barroom raconteur and as twisted circus performer, bringing together a disc of excellent, grimy, strangely archaic-sounding live performances (which, though perfectly recorded, makes Big Time sound like old-fashioned showbiz) and a disc of rambling anecdotes and between-song banter, far more offbeat than the wry monologues of the mid-70s, but no less entertaining.
What the live album aims not to do though, is to capture a performer on an off-night; that is the bootleg's job, and even the greats have their bad days, as documented by....
Drink At The Bar (Bremen, 1977)
In which a jetlagged, weary and irritable Waits barks his way atonally through a selection of songs from his first three albums with almost zero banter and regular statements like 'What do you want to hear? If you don't tell me what you want me to play then I'm going to play what I want to play.' Sounds as though he didn't want to play anything really; bummer.