This seemingly straightforward rule often has different meanings. In most cases, an artist's "first record" is a single, an EP or an album. But what about a demo tape (like the Talking Heads)? Or a song included on a compilation (like Metallica)?
In today's environment, as the traditional music business models crumble, how will new media rules apply to eligibility dates? Is releasing songs on MySpace official enough (like Black Kids)? Or selling self-pressed CDs at your gigs? The Rock Hall won't have to deal with these issues for a while, but you can bet they will need more clarification in the future.
In going through some of the original eligibility dates of Hall of Famers, one strange case stood out from the rest: Rod Stewart. Stewart was first nominated for the 1993 ceremony, which means he would have had to release his first record by 1967. But Stewart didn't release his first solo work, the album An Old Raincoat Won't Let You Down, until 1969. So Stewart became eligible from his work with the Hoochie Coochie Men (1964), who are definitely not in the Hall of Fame.
Following this logic, does this mean that Stevie Ray Vaughan should already be eligible because he was a member of the band Paul Ray and the Cobras, which released a single in 1975? (Not to worry SRV fans, Stevie hasn't been snubbed -- he hasn't been on the list of eligible artists that the Nominating Committee works from yet.)
It seems like Rod Stewart is just a weird exception to the Rock Hall's prerequisite, but let us know if you find any others.
Additionally, each artist page now has a direct link to Wikipedia, which of course contains all sorts of goodness (bios, list of members, discographies, etc.).
For example, let's look at The Beatles, a band the Rock Hall would not wait one second longer than necessary to induct. The Beatles released their first singles in 1962, which made them eligible for the Rock Hall in 1987. In September of 1987, the Rock Hall Foundation nominated them, and three months later in December, they were voted into the Hall. But the induction ceremony didn't take place until 1988—26 years after their first record, and they are considered to be in the class of '88.
So when does R.E.M. get inducted? Assuming they get voted in the first year they are eligible, 2006, they will be a part of the 2007 induction ceremony.
Update: R.E.M. is eligible this year -- they released "Radio Free Europe" in 1981. (Thanks, Martin)