(Let me start this post by saying I'm not a lawyer so the advice I give should not be taken as from a lawyer. I'm a person who is informed about legal issues as I'm studying to become a lawyer.)
Most of you are familier with Getty Images, who have copywrites to one of the largest collections of digital images on the internet.
Webmasters often search for photos with the Google image search. Don't be fooled into thinking you can just use any of those images Google kicks up. A good number of them are likely to be Getty images and if you use them, Getty is likely to send you a demand letter requiring a huge fine. So if you've never received a demand letter form Getty, consider yourself lucky, and start using services like iStockPhoto.com that are inexpensive and have huge inventories of images. Believe me, the small price you pay for services like this will save you tons of time, money, and agrivation if you were to accidently use one of Getty's images.
These Getty demand letters are a real annoyence as sometimes, Getty will carry through on their demand letters to make examples of Webmasters who are repeat offenders. In the UK, they will often sell the "debt" to a collection service, Moreton Smith who then bully/blackmail people into paying. Collection agencies can ruin your credit and harrass you endlessly.
How does Getty find you? They have special search engines that comb the internet for their images. They literally send out thousands of demand letters each year.
Getty does indeed have laywers on staff, and they do indeed take big business to court for copywrite infringement, if they think it is financially worth it. If they want to make an example out of us small time Webmasters, they sometimes do take us to court as well but not usually. They usually let collection agencies do their dirty work.
Their work is done by paralegals sending out thousands of notices like you got to intimidate you and scare you into paying them.
In reality, it would cost them too much to engage a lawyer for most cases to take you to court or to take most of the thousands of people they contact to court. Like any business, Getty does a cost/benefit ****ysis before they go to court and they would clearly see they would loose money in going after you.
If you have received a demand letter from Getty, seek legal consule.
For more information, here are some Getty posts and a forum devoted to Getty's scare tactics:
http://fightinggetty.proboards104.com/index.cgi
http://www.webhostingtalk.com/showthread.php?t=550522
http://www.sitepoint.com/forums/showthread.php?t=390902&page=1&pp=25 
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Alternatives to using Getty images (from the top of my head)
Unsplash.com - great for images with people. Only con is that the default download is a huge file some as big as 17MB with a 7500x10000 px resolution. You don't know this upfront, and when used for blogs/articles 1920x1280 is enough.
Pixabay.com - Huge repository of photos. You can customize the size of the image you want.
Similar to pixabay.com, pexels.com with image resize options.
I hadn't heard of Unsplash.com but will try it. Thanks
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