Creative Copyrights and Me

I guess for me, my concerns with copyrights and the material I create are just beginning.  I am concerned with what is going on with Shepherd Farley and his 'hope' poster with Obama.  I currently use images from the internet as templates for my designs.  For instance, I just finished a project using Curtiss P-40 Warhawks (war planes from the WWII era) in a propaganda poster.  The final project is a recreation of the airplane in the photo I found online and is very similar to the controversy of the AP photo Farley used as the basis for his 'hope' poster.  He is dealing with lawsuits because of his derivative use of AP photo that he did not have permission to use.  I worry about this because I also use photos as templates and the photos become derivative of the picture.

I have also used mugshots as templates for digital recreations.  I wonder if you know if those are fair game because they would be considered public domain.  I figure photos in that public domain area could be used as opposed to AP photos or any other rights managed photos.  I want to use my elements legally but those lines can sometimes be foggy and I don't fully understand.