While I disagree with you, I'm glad you mentioned it--this may be one of the few examples where a side-project has made an album which, for me, made the original artist irrelevant. Once I started listening to Ugly Casanova I never had a reason to break out a MM album. haha.

sometimes i think i like "teenager of the year" more than any pixies album

I thought that one album on Sub Pop was a bit of a throwaway...they also put on one of the worst shows I've ever seen...I remember they all seemed pretty smacked out and the keyboard player fumbling with a cable for 30 minutes and nodding off...

The Three Johns (from The Mekons)
Screaming Tribesmen (from The New Christs)
The Full Time Men (Keith Streng of The Fleshtones w/ Pete Buck)
Naz Nomad (Dave Vanian of The Damned)
Captain Sensible's "Cricket EP" (also of The Damned)
Tin Machine (given how different this was from what Bowie was doing at the time, I think it qualifies)
Cinerama (from The Wedding Present)
Time Zone (from PiL)
Byrne/Eno's My Life In The Bush Of Ghosts (from Talking Heads)
Jimmy Pursey (Sham 69) and Peter Gabriel's "Animals Have More Fun"
Osaka Pop Star (from The Voidods, Misfits, Ramones)
Iggy Pop & Debbie Harry's contribution to Red, Hot, and Blue

While not "side" projects, the following moves/migrations/guest appearances are pretty cool:

Meatloaf providing vox on about half of Nugent's "Free For All"
Bruce Foxton joining up with Stiff Little Fingers
Marty Wilson-Piper playing on The Saints' "Nothing Is Straight In My House"
Steve Jones and then Andy McCoy playing w/ Iggy Pop
Thomas Dolby playing w/ The Thompson Twins and Lene Lovich

Ok, I'm a little nervous now

How could I forget to mention Son Volt, who are like the king tree for side projects, solo works, and new ventures?

I would say Minus 5/Young Fresh Fellows kinda holds that crown.

Also...Reindeer Section > Snow Patrol
Sebadoh = Dinosaur Jr. but Folk Impolosion < Sebadoh and pretty much all of J's side stuff is terrible.
really enjoyed the Clogs records that feature members of the National, as well as Belle Orchestre featuring members of Arcade Fire

Handsome Furs = Wolf Parade but Sunset Rubdown < Wolf Parade

Not sure if Tom Tom Club qualifies as a side project, but if so I dig 'em. Well, I dig 'em either way, ya know.

Eleventh Dream Day -- Freakwater
They are so different that I really can't even compare them to one another. But I love 'em both.

they did at the time...

The heads are the modern incarnation of / affirmed his sideproject and I assume, FR is only about the Stooges played MW on the record.

Rockpile = Nick Lowe > Dave Edmunds = Billy Bremner