So Mick Jagger hosted this weekend's "Saturday Night Live" season finale, prompting rumors about his Rolling Stones bandmates turning up for the musical portion of the program. That didn't come to pass, but what they came up with was still way cool -- collaborations between the host and Foo Fighters, Jeff Beck and most of all Arcade Fire, who backed Jagger up on an at-times ragged yet great rendition of "The Last Time."

For good measure, Jagger led Arcade Fire and the rest of the cast in playing a very nice goodbye serenade to departing cast member Kristen Wiig at the close of the show.

Going into Sunday night's Grammy Awards ceremony, conventional wisdom was that Durham-based Merge Records would win one. But almost no one could have predicted that it would play out as it did, with Merge's Arcade Fire losing in two minor categories before unexpectedly walking away with the evening-ending grand prize: album of the year, over a field of nominees including Eminem and Lady Gaga.

Merge co-owners Mac McCaughan and Laura Ballance missed seeing it in-person because their band Superchunk is about to start a Japanese tour. McCaughan was already in Japan by Sunday, while Ballance turned her phone off and went to bed because she had a flight early Monday morning.

But Merge publicist Christina Rentz and retail director Jamie Beck were at Los Angeles' Staples Center to bear witness. And Beck actually called Arcade Fire's victory in advance.

"Maybe I'm naive, but I'm hopeful all the time," Beck said. "We found out Arcade Fire was playing last, and I knew that the album-of-the-year winners are usually panting when they accept because they've just come offstage. So we had theories about them slipping in and surprising everybody."

Still, Arcade Fire seemed like the longest of longshots to take album of the year -- especially after losing to Black Keys for best alternative album, which most observers expected Arcade Fire to win. Things looked even more dire when Black Keys also beat out Arcade Fire for best rock performance by a duo or group with vocals.

Just under five hours after that announcement, Arcade Fire took the stage to play, the last album-of-the-year nominee to perform. Barbra Streisand was the presenter, and she seemed almost puzzled as she called out the winner.

"When Barbra Streisand stuttered out their name, we just screamed at the top of our lungs," Rentz said. "We were up on the second level and everybody around us was leaving -- they had no idea who we were or the band was. We were completely stunned."

After a quick acceptance speech by frontman Win Butler, Arcade Fire went back to their instruments and played a second song as a victory-lap outro while the credits rolled. The band's after-party was a jubilant affair, with bassist Richard Parry declaring, "We robbed a bank!"

"We were saying that it kind of felt like the world tilting a little bit," Rentz said. "I did tell Win that the best way to celebrate this would be for them to come play in North Carolina -- 'C'mon, guys, we'll have a barbecue for you!' They were leaving for England the next day for the Brit Awards and I told them, 'Good luck topping this!' They just laughed and said, 'Don't worry. It won't.'"

ADDENDUM (2/20/11): Dissent!

Grammy saved its best for last for Merge Records. It looked like the Durham-based label was going to strike out despite earning three nominations for Montreal rock band Arcade Fire's "The Subburbs." After losing both alternative album and rock performance by a duo or group with vocals to the Black Keys, Arcade Fire seemed like a long shot to win album of the year.

In a stunning turn-around, however, Arcade Fire won the prize over Eminem, Lady Antebellum, Lady Gaga and Katy Perry. It was the final award handed out, and the first Grammy that Merge has ever won. And in a nice little extra bonus, the group got to close the telecast with another performance -- the only group that got to play more than once. The Grammy Award sitting on an amp was a nice touch.

It looks like Arcade Fire, and Merge, won the Grammys.

The record industry is still dying, and yet very fine albums keep right on coming out. Here are my 10 favorites from 2010 -- that was the year that was.

(1) Arcade Fire, "The Suburbs" (Merge) -- Supposedly there aren't any "consensus" bands anymore, acts everyone can agree are worthy. Except for Arcade Fire, a Montreal band that's easy to love all the way around. Truly great.

(2) Laura Veirs, "July Flame" (Raven Marching Band) -- If you want someone's attention, whisper. Better still, murmur softly and set it to catchy, exquisitely crafted acoustic pop arrangements. Lovely.

(3) Doug Paisley, "Constant Companion" (No Quarter) -- Speaking of quiet, this is the sort of record that might have you holding your breath for fear of breaking the spell. It's sturdy enough to hold up, though.

(4) Robert Plant, "Band of Joy" (Rounder) -- Plant continues his Appalachian Mountain hop, this time with iconic Nashville country-blues guitarist Buddy Miller in charge of the proceedings, yielding wonderfully spooky results. Plant will bring this show to Raleigh in February. You'd be crazy to miss it.

(5) Titus Andronicus, "The Mointor" (XL) -- Screaming bloody murder also has much to recommend it, especially if one is obsessed with the Civil War and Bruce Springsteen in equal parts. Club-sized arena rock never had it so good.

(6) Kanye West, "My Beautiful Dark Twisted Fantasy" (Roc-A-Fella) -- You have to give the guy credit for boundless ambition, as befits an ego of West's magnitude, and danged if he doesn't pull it off. West still ain't quite as good as he thinks he is, but he's getting closer.

(7) Carolina Chocolate Drops, "Genuine Negro Jig" (Nonesuch) -- In which the best new old-time stringband in America (not just the Triangle) graduates from cool novelty to serious contender. The aforementioned Buddy Miller is tentatively set to produce their next album, which should be fantastic.

(8) Sharon Van Etten, "Epic" (Ba Da Bing) -- It's only 32 minutes long, barely album-length nowadays. Nevertheless, the cheekily titled "Epic" packs a year's worth of obsession, single-minded determination and emotion into its seven songs.

(9) The Love Language, "Libraries" (Merge) -- Brian Wilson has nothing on Stuart McLamb, main man of The Love Language. "Libraries" is a sonic pop cathedral, both beautiful and terrifying, haunted by McLamb's dead-of-night howl.

(10) Alejandro Escovedo, "Street Songs of Love" (Fantasy) -- Love lost, found, squandered and thrown away is the overriding theme to Escovedo's rippin' new album, a great followup to 2008's equally stellar "Real Animal." Long may he roar.

Merge Records' year of living fabulously continues. The Durham-based label has picked up three nods in the latest round of Grammy nominations, for Arcade Fire's chart-topping "The Suburbs," including album of the year. That one's a longshot, but Arcade Fire looks to be the front-runner for best alternative music album. If that comes through, it will be Merge's first-ever Grammy. The album is also nominated for best rock performance by a duo or group with vocals.

The Grammys will be presented on Feb. 13.

Other Grammy nominations of local interest:

Carolina Chocolate Drops scored a nomination for best traditional folk album with their major-label debut, "Genuine Negro Jig."

Triangle gospel institution Shirley Caesar's "A City Called Heaven" was nominated for best traditional gospel album.

High Point "American Idol" Fantasia's "Back To Me" picked up nominations for best R&B album and best female R&B vocal performance. "Bittersweet," a track from her album, was nominated for best R&B song (a songwriter's award).

Monroe native Calvin Richardson's "You're So Amazing" got a nod for best traditional R&B vocal performance.

UNC-Chapel Hill alumnus Lewis Black's "Stark Raving Black' was nominated for best comedy album.

Well, Merge Records' stay in the chart penthouse didn't last long, but the Durham-based label didn't fall too far down the Billboard 200 album sales chart. After debuting at No. 1, Arcade Fire's Merge release "Suburbs" has dropped to No. 2 -- behind Detroit rapper Eminem, who reclaims the top spot.

Meantime, Duke University alumnus Mike Posner is also in the top-10 with his debut album, "31 Minutes to Takeoff." It debuts not far behind Arcade Fire, at No. 8. The Posner album's first single "Cooler Than Me" is also hanging in at No. 6 on Billboard's Hot 100 singles chart.

It came down to the wire, but Merge Records has topped the charts for the first time ever. The Durham-based label will be No. 1 on the Billboard 200's Aug. 21 album-sales chart with "The Suburbs," the highly acclaimed new album by Montreal rock band Arcade Fire.

"The Suburbs" sold 156,000 copies its first week out, Merge's biggest-ever one-week sales total. The album just beat out Detroit rapper Eminem, whose "Recovery" registered sales of 152,000 to come in at No. 2.

"We definitely had all hands on deck with everybody working to get the word out the past week," Merge co-founder Mac McCaughan said. "The band had an amazing week, too, selling out two nights at Madison Square Garden. And of course, the biggest thing of all is that it's a great record."

The top of the charts is a long way from Merge's humble origins 21 years ago, when its "office" was co-founder Laura Ballance's bedroom in Chapel Hill. Merge was putting out cassette tapes and vinyl singles rather than compact discs and digital downloads back then, with sales in the hundreds rather than hundreds of thousands.

Two decades of steady growth later, Merge is a chart fixture. The label has reached Billboard's top-10 before with Arcade Fire, Texas rock band Spoon and the pop duo She & Him. Getting to No. 1 was the last remaining milestone, although not everyone is impressed.

"For me, it's sort of akin to sports -- this need to be the winner, No. 1," said Ballance. "Sure, I think it's great. But I also feel a certain distance from it. We always do everything we can to sell records and maybe we're getting better at it. Or maybe it's a sign that the record industry as a whole is not doing well."

Merge is one of the industry's few bright spots nowadays. Thanks to the digital revolution, the record business has been mired in a decade-long slump; sales are less than half of what they were at the turn of the century. Merge, however, is thriving.

Under McCaughan and Ballance's leadership, Merge has prospered by not trying to grow too much or too fast. The label's focus remains alternative rock, but with room for spaced-out country (Lambchop), atmospheric folk-rock (M. Ward) and strange experimentation (Music Tapes).

The label has 14 employees and will release 16 new full-length albums in 2010 -- a fraction of what the Interscopes and Sonys of the world put out. But Merge stays focused on working a few releases at a time, which can pay big dividends. Arcade Fire is the label's top seller, with three albums that have sold more than 1 million total copies.

"Merge is one of the great success stories of the modern era," said Steve Knopper, who covers the music industry for Rolling Stone magazine. "They're just much better at talent discovery and artist development than most labels. By now, they're one of the great independent labels, going all the way back to Motown, Island, Sun, Chess. And it's extraordinary that they're doing it at a time when records just don't sell like they used to."

XX Merge, the celebration of local label Merge Records' 20-year anniversary, kicked off Wednesday night in Carrboro. Click through for a report, plus some back verbiage pertaining to the highlight of the evening.