Continuity mistake: Glen Holland owns a Chevy Corvair throughout the film. The car at the beginning of the film is a 1961 model 500 (the base model with bench seats), but at the end of the film it is a 1964 Monza (the top of the line model, with bucket seats).
Continuity mistake: When Glen Holland hears that John Lennon was killed, he is sitting at his piano and outside the window it is sunny and leaves are on the trees. As he walks home, it is overcast, snow is on the ground, and the leaves are off the trees. Since Lennon was killed in December of 1980, the latter "weather" would be correct.
Revealing mistake: Anytime the camera is on Richard Dreyfuss' hands while he's playing the piano, it is clear that he is not actually playing; his hands are frequently in the wrong part of the keyboard for the sound being produced. At other times, when his hands are moving down the keyboard, the pitch we hear is going up, or vice-versa.
Factual error: Mr. Holland starts teaching at JFK in fall of 1964 (q.e.d by the fact that the first graduating class seen is class of 1965). However, when Holland first meets the assistant principal parking his Corvair, the latter asks him if he's read Ralph Nader's book (Unsafe at Any Speed), which was not published until November of 1965.
Continuity mistake: In the scene where Mr. Holland is introducing himself to the class, he writes his name on the board. The "A" in his name switches between having a rounded top to a pointed top between shots.
Other mistake: At the beginning of one of the school years, there is a sign on the front of the school that says, "Welcome back Class of 1980". A few months later, in December of that same school year, John Lennon is murdered. Since that class is graduating the following spring, the sign should have read "Welcome back Class of 1981", not 1980.
Continuity mistake: At the end, when Mr. Holland is conducting his symphony, there is a closeup of Iris lifting her camera up to take a picture. The shot cuts away to show Mr. Holland. You can see Iris and Cole in the background on the lower right of the screen and they are holding hands with no camera in sight.
Answer: Its "Imagine" by John Lennon.