Although it was initially released on John Wesley Harding at the end of 1967, I can write about “All Along the Watchtower” as a 1968 release because it was the sole Bob Dylan contribution from that year. Dylan released this as a single in November 1968, somewhat redundantly since The Jimi Hendrix Experience had released the definitive version in September of that same year.
There are a large number of Dylan songs that are better known in their cover version than in the Dylan version – songs by The Byrds and by Peter, Paul and Mary – but this one is an absolute blowout. Indeed, there must be a large number of people in the world who think of this as a Hendrix song that Dylan has covered. And indeed he has. His website shows that this is the song that he has performed most frequently in concert (2, 186 times – that is a mind-boggling number no matter how you slice it). Dylan didn’t start performing it live until 1974, and he has always leaned more towards the Hendrix version than to his own album cut.
The Hendrix version is absolutely iconic – you can recognize it easily from the opening notes. It is positively anthemic. Dylan’s version is hard to hear in retrospect – you’re always comparing it to its better known cousin, which has that much more energy. Dylan’s version isn’t a bad one, it’s just that Hendrix’s is a great one.
Lyrically, it’s a vexing song. Check out the way people grapple with it on various websites. Some see it as a reference to the Book of Isaiah, but that mostly stems from the image of the watchtower. Others read it as a class war statement. Some see Jesus in the Joker. It is certainly highly fatalistic and mystical.
On the remake of Battlestar Galactica, “All Along the Watchtower” holds the key to all of human understanding. That’s a lot of weight to put onto a pop song, but if you’re going to explain your entire series that way, this is probably one of your better choices. It’s a cyclical song that fits strongly with the themes of that show.
Given how frequently Dylan has performed it, I’ve often wondered if it is his “favourite” among his songs. “Like A Rolling Stone” is the only song that he has performed 2,000 times (and fewer than “Watchtower”), and only a small handful of others cross the 1,000 performances mark. To me, it sounds like the first song that signifies the fully mature Dylan sound, but even then it is filtered through the Hendrix sensibility and not the Nashville sound that you find on John Wesley Harding. It’s such a short, cryptic song – it has all the spare elements that Dylan seemed to be looking for at that point in his life.
Here’s the Battlestar Galactic version:
LongAndWastedYear 
I’ve always preferred the Dylan version. It has a quiet undercurrent of anticipatory dread. It feels like a conversation between two people expecting to die, one fearful and one accepting his fate. Perhaps they are in a medieval city that is the path of one of the Mongol hordes. And this sense of foreboding seems absent in the heavy-handed Hendrix version.
I like them both, for the reasons each of you like the one you like. bart, I did not know that the Hendrix version was released before Dylan’s, but I’m not clear whether you yourself heard the Hendrix version first or not. Your reaction might be partly a function of encountering the Dylan as version of a Hendrix song rather than the other way around.
I’ve always loved how the simple displacement of the first verse (in terms of narrative) to the end makes the song seem so mysterious and hermetic rather than a standard-issue Dylan oblique narrative (not that there’s anything wrong . . .) Reminds me of the haunting British folk song “She Moves Through the Fair,” where the key phrase “my dead love” may or may not be a mis-transcription of “my dear love,” or the latter phrase may be a bowdlerization of the former, but in any case one is a love song where the singer’s beloved comes to him, perhaps really, or perhaps in a dream, and the other is a ghost song where the singer’s dead lover says she will soon join him, which is way creepier and more memorable.
Perhaps in the idle years (i.e., weeks) you could examine which Dylan song would be most improved by moving, deleting, or importing from another Dylan song one single verse. (No fair saying you’d delete one verse from “Rainy Day Women #12 & 35” because then there’d be less of it.)
Rusty, I’m sure that I would have heard the Hendrix version dozens of times before I’d ever heard a Dylan version. My first exposure to Dylan’s version would likely have been on Biograph, and the Hendrix version is such a staple that I couldn’t not have heard it (and, indeed, I know my friend Jake probably played it for me a few dozen times). So, yes, I’m coming to the Dylan version on JWH very belatedly, and it is impossible to unhear the Hendrix, and also the Dylan pays tribute to Hendrix version since the song is on five of his live albums (!!!!!).