I'm kind of an alt-country and folk guy so don't listen to much new country, so with that proviso out of the way, one of my favorites of modern times is Gillian Welch. She and her husband/partner David Rawlings did a very good one a few years ago called "Time (the Revelator)" that's destined to be a modern classic in the loosely defined country folk genre, and very nice sounding too. Not really quite what I call country, but recorded simply, live in the studio with just a couple of Neumann mikes, Gillian and David, banjo and vintage acoustic guitars, and a lot of good music. Gillian describes the album, "As opposed to little tiny folk songs, they're really tiny rock songs performed in an acoustic setting. In our heads we went electric without changing instruments."
Also Richard Buckner is a big favorite along those same country folk lines. "Bloomed" is outstanding, along with some of his newer stuff too. The 1999 Rykodisc reissue has some nice bonus tracks, but it is kind of pumped up unfortunately. Just got "Meadow" from last year and it has an outstanding cast of musicians and lots of great songs.
And Califone has a lot of country folk leanings, especially on the excellent "Roomsound". A little more eclectic, for sure, but really typifies what I like in music. A lot of their music leans more toward the bluesy country popularized by the Stones on records like "Exile On Main Street", but Califone and their predecessor Red Red Meat add some electronic textures and more experimental sounds.
And the Walkabouts. They did an album of covers in the mid 90s called "Satisfied Mind" that is outstanding, both musically and sonically. Real country. Even goes back to grab the 1927 Carter Family classic "The Storms Are On the Ocean" and make it a modern, moody classic. Beautiful album. I just recently picked up their "Ended Up A Stranger" from 2002 and it's really nice. Shouldn't have waited so long. Carla, as always, is a gem of a singer. Kinda wish she sang the lead even more often. The band is hot. The music is great. Even the sound is pretty nice, with Phil Brown producing and mixing along with the band, and Denis Blackham mastering. Brown and Blackham are a pretty good team. I have some others they've worked on like the Talk Talk reissue of "Spirit of Eden" that sounds great. Just honest and natural, without the fake pizzaz that wrecks a lot of CDs.
And of course, Lucinda Williams is the real thing, anything by her is choice. I'm partial to the self-titled one from the end of the 80s, but "Car Wheels" from the mid 90s is a certified classic, and should probably be in just about any collection of modern music.
Over The Rhine is another one that I've mentioned before. Have you heard that band? A few years ago they put out a sprawling 2-CD (or gatefold LP) epic with both acoustic and electric sections called "Ohio" that was easily one of the best of 2003. Again not entirely country, but Karin Bergquist has such a wonderfully expressive voice and you won't find music and lyrics much more compelling than this. Think maybe something along the lines of Fleetwood Mac meets Gram Parsons (or maybe Whiskeytown covering Gram Parsons like they did on that great tribute album from a few years ago that Emmylou Harris put together called "The Return of the Grievous Angel"). The lush sound is a little reminiscent of the Cowboy Junkies or Blue Rodeo. Not as overtly pop sounding as the Fleetwood Mac reference would suggest (nor as dreamy and hedonistic either). Think more "Tusk" than something like "Rumours". Somewhat spiritual. Nicely recorded by Paul Mahern at Echo Park in Bloomington, Indiana on 2" analog tape.
And speaking of Emmylou Harris, the one she did with Daniel Lanois in the mid 90s called "Wrecking Ball" is outstanding.
Listening to one of my favorites from the mid 90s right now, Palace Music (Will Oldham and family and friends) "Viva Last Blues". Might not be what you're after, but always knocks me out. Steve Albini recorded cross between Neil Young's folk and the Stones' dirty gospel blues. Yea, pretty great, creaking, crackly voice and all. Johnny Cash recorded his amazing title track from "I See A Darkness" on one of his last albums, and did a great job, but I still love Will Oldham's version the best. Either this one or that one is a great intro.
Tons more, but I'll stop there
Oh yea, Wilco's "Being There". And Son Volt's "Trace". Now I'll stop.