After having to answer the same questions regarding copyright and images etc. I came across this excellent primer that more or less explains exactly what you need to know if you are going to be running a website of your own.

It's a long read, but you definitely need to know what it says. So if even if it takes a couple of days to read... do yourself a favour and read the whole thing available at the link below.

Source: INTELLECTUAL PROPERTY LAW PRIMER FOR MULTIMEDIA AND WEB DEVELOPERS

An extract of some of the most important bits...
Quote:
There are a number of myths out there concerning the necessity of getting a license. Here are five. Don't make the mistake of believing them:

þ Myth #1: "The work I want to use doesn't have a copyright notice on it, so it's not copyrighted. I'm free to use it."

Most published works contain a copyright notice. However, for works published on or after March 1, 1989, the use of copyright notice is optional. The fact that a work doesn't have a copyright notice doesn't mean that the work is not protected by copyright.

þ Myth #2: "I don't need a license because I'm using only a small amount of the copyrighted work."

It is true that de minimis copying (copying a small amount) is not copyright infringement. Unfortunately, it is rarely possible to tell where de minimis copying ends and copyright infringement begins. There are no "bright line" rules.

Copying a small amount of a copyrighted work is infringement if what is copied is a qualitatively substantial portion of the copied work. In one case, a magazine article that used 300 words from a 200,000-word autobiography written by President Gerald Ford was found to infringe the copyright on the autobiography. Even though the copied material was only a small part of the autobiography, the copied portions were among the most powerful passages in the autobiography. Copying any part of a copyrighted work is risky. If what you copy is truly a tiny and nonmemorable part of the work, you may get away with it (the work's owner may not be able to tell that your work incorporates an excerpt from the owner's work). However, you run the risk of having to defend your use in expensive litigation. If you are copying, it is better to get a permission or a license (unless fair use applies). You cannot escape liability for infringement by showing how much of the protected work you did not take.

þ Myth #3: "Since I'm planning to give credit to all authors whose works I copy, I don't need to get licenses." If you give credit to a work's author, you are not a plagiarist (you are not pretending that you authored the copied work). However, attribution is not a defense to copyright infringement.

þ Myth #4: "My multimedia work will be a wonderful showcase for the copyright owner's work, so I'm sure the owner will not object to my use of the work."
Don't assume that a copyright owner will be happy to have you use his or her work. Even if the owner is willing to let you use the work, the owner will probably want to charge you a license fee. Content owners view multimedia as a new market for licensing their material.

In 1993, ten freelance writers sued the New York Times and other publishers over the unauthorized publication of their work through online computer services. And the Harry Fox Agency and other music publishers have sued CompuServe, an online computer service, over the distribution of their music on the service.

þ Myth #5: "I don't need a license because I'm going to alter the work I copy."

Generally, you cannot escape liability for copyright infringement by altering or modifying the work you copy. If you copy and modify protected elements of a copyrighted work, you will be infringing the copyright owner's modification right as well as the copying right.

Special Myths about the Internet
Much public domain material is available on the Net government reports and uncopyrightable factual information, for example. However, much of the material that is on the Internet is protected by copyright.

.....Copying Material from the Net
Don't make the mistake of believing these myths about copying material from the Net:

Internet Myth #1: If I find something on the Net, it's okay to copy it and use it without getting permission.

While you are free to copy public domain material that you find on the Net, generally you should not copy copyrighted material without getting permission from the copyright owner whether you find the material on the Net or in a more traditional medium (book, music CD, software disk, etc.).

Internet Myth #2: Anyone who puts material on a Web server wants people to use that material, so I can do anything I want with material that I get from a Web server.

Individuals and organizations put material on a Web server to make it accessible by others. They do not give up their copyright rights by putting material on a Web server. Also, the person who posted the
material may not own it.

Internet Myth #3: It s okay to copy material from a Home Page or website without getting permission.

Much of the material that appears in websites and Home Pages is protected by copyright. If you want to use something from someone else s Home Page or website, get permission unless permission to copy is granted in the text of the Home Page or website.

Posting Material
And don t believe these myths about how copyright law applies to putting copyrighted material owned by others on the Net:

Internet Myth #4: It s okay to use copyrighted material in my Web site so long as no one has to pay to visit my Web site.

Unless your use of the copyrighted work is fair use (see Fair Use, later in this article), you need a license to copy and use the work in your website even if you won t be charging people to view your website. (You also need a public display license.)

Internet Myth #5: It s okay to make other people s copyrighted material available on my Web server so long as I don t charge people anything to get the material.

Copying and distributing copyrighted material without permission can be copyright infringement even if you don t charge for the copied material. Making material available for others to copy can be contributory infringement.

When You Don't Need a License
You don't need a license to use a copyrighted work in three circumstances: (1) if your use is fair use; (2) if the work you use is in the public domain; or (3) if the material you use is factual or an idea.


Fair Use
You don't need a license to use a copyrighted work if your use is "fair use." Unfortunately, it is difficult to tell whether a particular use of a work is fair or unfair. Determinations are made on a case-by-case basis by considering four factors:
þ Factor #1: Purpose and character of use. The courts are most likely to find fair use where
the use is for noncommercial purposes, such as a book review.
þ Factor #2: Nature of the copyrighted work. The courts are most likely to find fair use
where the copied work is a factual work rather than a creative one.
þ Factor #3: Amount and substantiality of the portion used. The courts are most likely to find fair use where what is used is a tiny amount of the protected work. If what is used is small in amount but substantial in terms of importance, a finding of fair use is unlikely.
þ Factor #4: Effect on the potential market for or value of the protected work. The courts are most likely to find fair use where the new work is not a substitute for the copyrighted work.

If your multimedia work serves traditional "fair use" purposes - criticism, comment, news reporting, teaching, scholarship, and research - you have a better chance of falling within the bounds of fair use than you do if your work is a sold to the public for entertainment purposes and for commercial gain.

Public Domain
You don't need a license to use a public domain work. Public domain works - works not protected by copyright - can be used by anyone. Because these works are not protected by copyright, no one can claim the exclusive rights of copyright for such works. For example, the plays of Shakespeare are in the public domain. Works enter the public domain in several ways: because the term of the copyright expired, because the copyright owner failed to "renew" his copyright under the old Copyright Act of 1909, or because the copyright owner failed to properly use copyright notice (of importance only for works created before March 1, 1989, at which time copyright notice became optional)....

Excerpt from: INTELLECTUAL PROPERTY LAW PRIMER FOR MULTIMEDIA AND WEB DEVELOPERS by J. Dianne Brinson and Mark F. Radcliffe Copyright 1996