Pneumonia and am currently taking biaxin (clarithromycin). My mouth is producingand annoying. Is this a side effect of the drug, or being ill?

Both possible. The medication you are taking can produce unpleasant tastes, but you don't specify what the problem is. Certainly people who are ill may have a variety of manifestations of the illness, and in addition, antibiotics can predispose one to secondary infections, like thrush, which can be very unpleasant.