Dan put me onto Turtle's 78 RPM Jukebox, a site which contains some very nice recordings of old 78 RPM records which are in the public domain. Some very cool stuff, but it contains the following puzzling disclaimer:
All original recordings are understood to be in the public domain.
All selections in this jukebox are the sole property of Turtle Services Limited.
Each contains a unique signature.
Enjoy each for your personal pleasure but do not use any for a commercial purpose!
If something is in the public domain, you can't put any restrictions on its use. From the Copyright FAQ:
Where is the public domain?
The public domain is not a place. A work of authorship is in the public domain if it is no longer under copyright protection or if it failed to meet the requirements for copyright protection. Works in the public domain may be used freely without the permission of the former copyright owner.
You can't claim that a work is in the public domain and then turn around and pretend like you have copyright on it without creating a new derivative work out of it. The courts have pretty consistently upheld that mastering old material into new formats does not qualify because typically such transcriptions involve purely technical as opposed to artistic decisions.
Nolo has an excellent book on the subject that can help educate you on issues relating to this.
Addendum: To back up my claim, check out this page, section 496.03(b)(2) Noncopyrightable elements for a list of modifications which do not justify the claim of copyright.