"Genius" won eight awards, including album of the year.
The sentimental favorite won for best pop album and best pop collaboration with vocal for "Here We Go Again" with Norah Jones (search). Later in the evening, "Here We Go Again" won record of the year.
"I'm going to cry, actually," Jones said as she accepted the trophy for record of the year. "I think it just shows how wonderful music can be."
With more than two million copies sold, "Genius Loves Company" (search) is the best-selling album of Charles' career. The legendary singer died of complications from liver disease in April at 73.
Following a colorful performance by some of the evening's nominated acts, the first prize of the televised portion of the ceremony was given to Los Lonely Boys (search) for their song "Heaven," for best pop performance by a duo or group with vocal.
Prince (search), who has recently made a comeback with his album "Musicology," took home the second award of the night for his song "Call My Name," for best male R&B vocal performance.
Green Day followed with a win for best rock album for "American Idiot," and Maroon 5 (search) won the coveted best new artist award.
Maroon 5 frontman Adam Levine seemed a little guilty about beating hot new rap star Kanye West (search), whom many had presumed would be the winner in the best new artist category.
"Kanye West, I want to thank you so much for being wonderful," he said. West had been holding his hands together as if in prayer as the winner was being announced.
Keys and Usher, each each nominated for eight Grammys, shared an award for best R&B performance by a duo or group with vocals for their No. 1 duet "My Boo." Keys won a total of four awards while Usher won three.
West, nominated for 10 Grammys, more than any other artist, won for best rap album for "The College Dropout." In the pre-telecast ceremony, he won two other awards, including best rap song for "Jesus Walks."
In accepting the award for best rap album, West referred to his near-fatal car accident a few years ago, promising to live life to the fullest.
"I plan to celebrate and scream and pop champagne every chance I get because I'm at the Grammys, baby!" he shouted.
Loretta Lynn (search) took home the award for best country album for "Van Lear Rose," beating out Tim McGraw and hot new country sensation Gretchen Wilson.
U2 (search) took home three awards, and seemed truly surprised to win in the best rock performance by a duo or group with vocal category for their song "Vertigo."
John Mayer beat Keys and West in the song of the year category, taking home the prize for "Daughters."
West, Wilson, McGraw, Green Day, U2, Maroon 5, Mayer, Usher, James Brown and host Queen Latifah also gave performances. Marc Anthony (search) and Jennifer Lopez (search) sang a duet in Spanish, their first performance together as a couple. Joss Stone (search) and Melissa Etheridge (search), who is battling breast cancer and has her head shaved, brought the house down with a tribute to Janis Joplin.
Stevie Wonder, Bono, Keys, Brian Wilson and others performed The Beatles' "Across the Universe" to raise funds for tsunami victims in Asia and Africa. The track will be available at Apple's iTunes Music Store, and the proceeds will be donated to relief charities.
Stars ranging from nominated rapper Jadakiss to Rob Thomas of Matchbox Twenty and Lisa Marie Presley arrived at the downtown Staples Center under a mostly cloudy sky, but there was no rain.
Some veterans finally were honored by the Recording Academy. Steve Earle's left-leaning "The Revolution Starts ... Now" won for contemporary folk album. And Rod Stewart — who had complained in recent years how he'd never won a Grammy — won for traditional pop vocal album for his standards recording "Stardust ... The Great American Songbook Vol. III."
And the often-maligned Britney Spears finally won her first Grammy: best dance recording for "Toxic."
Among the other early winners were non-musicians. Former President Bill Clinton (search) won for best spoken word album for his adaptation of his best-selling autobiography, "My Life"; another winner was "Scrubs" actor Zach Braff (search), whose movie "Garden State" garnered him best compilation soundtrack album for a motion picture, television or other televised media.
"Wow! I never thought I'd win a Grammy. That is pretty cool! Yeah!" the exuberant actor said.
FOX News' Jennifer D'Angelo and The Associated Press contributed to this report.