Sparks and Brian Eno - the entire Music that you can dance to album - I think with proper production MTYCDT could have blown away the talking heads/Eno albums. Also having Merry Clayton (of Gimme Shelter fame) doing a duet with Russell Mael with the title track
Steve Hackett and Jon Anderson - weak point of Hackett solo career is his relative weak vocals. Having him be the songwriter but collaborating with a better vocalist could produce a masterpiece
PJ Harvey and Radiohead - yes I know that thom Yorke did a duet with pJ before. However I would like her to do a collaboration with the band itself. Why? Well she is an extremely powerful vocalist but limited by music with very simple arrangement that emphasise on rawness rather than any sophistication (in a way her music is very plastic Ono band-Esque). Now that works for her but I'm curious of hearing her singing music over more fuller and substantial arrangement.
Jeff Buckley and Genesis - jeff Buckley is essentially a male operatic diva (he did do a cover of Purcell's Dido's Lament). I would like to see his vocals within a progressive rock contest (he is also a fan of prog era Genesis as well). A romanticised heart on the sleave personalised prog rocker would have been interesting alternative to the more common mystical storyteller
Triffids and Nick Cave - triffids wrote the greatest nick cave song not written by Nick Cave and I suspect their music would gel together a lot.
Bjork and B-52's - I actually dislike B-52 but The sugar cubes debut album sounds like B-52 but with great songwriting. It would be interesting hearing Bjork returning back to guitar based music and the eccentricity of the B-52 would suit her well.
Morrissey and the go-betweens - the vocals of go between a is a bit too understated for my liking. However their jangly pop sound with the larger than life Morrissey vocals could make an interesting Smith-like music