The Artist: Pato Banton featuring Sting
The Movie: Ace Ventura: When Nature Calls
To answer your first question, yes, this is a cover of The Police song, hence why Sting pops up singing backing vocals here. Pato Banton is a British reggae singer, and when you consider and realize that The Police were often a reggae band at heart, suddenly this doesn't seem like much of a stretch for a cover song.
One of the reasons the original version of "Spirits..." has a pronounced keyboard melody is that it was attempting to give a poppier sound to what is essentially an almost pure reggae track. Pato Banton amplifies the reggae aspects of the piece and mixes them with some '90s R&B textures, courtesy of producer Trevor Horn.
I definitely won't go so far as to say that this is better than The Police version, it is however an interesting interpretation of the song, potentially truer to the song's roots than The Police were able to achieve at the time. Additionally, the song is more atmospheric timeless than the original, which with its keyboard and vocal effects, sounds dated.
There's a good chance I'll be revisiting this soundtrack at another point to discuss another song from it, but for now, you can enjoy this piece. And if the spirit moves you, you can also check out the original, Police version from their album, Ghost In The Machine:
Well, that cover art is actually from the greatest hits, and it's on that album too....you know what, here's the cover art from Ghost In The Machine:
Isn't that great? Best use of red LED's ever. Though if your alarm clock ever displays that, I'd get out of the house.