Wearing a gold jacket and black satin pantsuit, Hudson – backed by three singers – was serious and soulful in her powerful performance, which drew cheers from the audience three times during the song, especially when she hit high notes with a lot of vibrato.
The Los Angeles Convention Center audience of more than 1,500 immediately rose to its feet in a standing ovation as she mouthed the words "thank you" and took a small bow. As she looked up and saw the entire room standing and clapping, a look of genuine surprise came over her face, and her mouth fell open. She again mouthed the words "thank you," and waved to the crowd in appreciation.
Quipped host Jimmy Kimmel as Hudson, 27, exited the stage: "Wow. She reminds me so much of myself at that age."
Kid Rock came next with "Thank the Lord for the Night Time," and joked backstage to Rollingstone.com, "I'm gonna kill whoever made me follow Jennifer Hudson. Thanks!"
Fellow performer Josh Groban had a more thoughtful take, telling PEOPLE, "I think music can heal a lot of wounds and it's really cool that she's showing the courage to come out here tonight and do this."
Delirious Love for DiamondAs the man of the hour, Diamond, 68, was treated to an impressive lineup of renditions of his hits.
"It's a big honor. There's no question about it!" Diamond, 68, told PEOPLE. "It's totally unexpected but I'm loving every minute of this! ... I'm just going to sit back and enjoy myself!"
The Jonas Brothers kicked off the evening with "Forever in Blue Jeans." The range of stars doing their takes on legendary songs was stunning.
Adele performed "Cracklin' Rosie," Urge Overkill did "Girl, You'll be a Woman Soon," Coldplay did a stripped-down version of "I'm a Believer," Chris Cornell sang "Kentucky Woman," Josh Groban took to the piano for "Play Me," and the Foo Fighters gave the loudest performance of the night with "Delirious Love."
Tim McGraw sang "Hello Again" but it was his wife Faith Hill's "You Don't Bring Me Flowers" duet with Diamond" (see below) that received another standing ovation.
In his acceptance speech, Diamond acknowledged his family as inspiration and thanked his mom. "I want to thank my mom, who is here. I started taking guitar lessons when the Brooklyn Dodgers left Brooklyn," he said. "I decided to take some music lessons because I was really down [about it]."
Of his first guitar, which cost $10 and his parents paid off at $1 a week, he said, "It was a good investment, Mom. And you made a life for me. I thank you for that, Mom."
Diamond did several numbers with his band – "Cherry, Cherry," "Love on the Rocks" and "America" to name a few – before the night was concluded with an all-star sing-along of "Sweet Caroline," of course!
For a Good CauseAmong the items auctioned off at to benefit the MusiCares charity, which helps musicians who have fallen on hard times, was a Britney Spears London Experience that included tickets to her "Circus" tour kick-off concert in London with a special meet and greet and deluxe accommodations for $30,000.
Diamond also donated his own 1956 Thunderbird for the auction, and Recording Academy President/CEO Neil Portnow bought it. He even promised to take Diamond out for a ride.
With reporting by EUNICE OH
Ron Wolfson / Landov