The song is "Way Down in the Hole," written by Tom Waits. During the first season, it was performed by The Five Blind Boys of Alabama. The second season version is the original Waits album version.
"The Wire" is done by the same folks who did the HBO mini-series "The Corner," and many of the same who worked on NBC's "Homicide." (The two earlier programs were based on books by "Wire creator/executive producer David Simon).