Update notice as of January 17, 2013: I have given this guide a MAJOR overhaul. It was originally written over a year and a half ago, and since then my own views and understanding of copyrights has changed. I felt that this guide should reflect those changes, so if you read this guide in the past, please take a moment to look through it again as I have added MANY new topics, information, and sources. Unlike my first draft, I have also changed my viewpoint to neutral throughout this writing.
Update notice as of July 17th, 2015: Check out DeviantArt's new article on art theft, fanart, copyrights, and other relevant topics! http://protectart.deviantart.com/journal/The-Art-Theft-Discussion-544490149
Update notice as of January 19th, 2019: Very small language adjustments to reduce the accusatory tone. Clarified statements that previously implied verdicts of illegality (example: statements such as "this is illegal" have been modified to "this is potentially infringing").