It's incredibly easy to copy and paste content (text and images) from other websites, but is it right or helpful for your website? The Internet is a massive exchange of information, but that doesn't mean the information isn't protected.
When you are about to use someone else's content, you should always consider these questions:
1. Why are you using the content?
2. What kind of content is it?
3. How much content do you want to take?
4. How will you benefit from using the content?
In terms of text, it is always appropriate to contact the author for permission, use only a portion of text, provide source details including a link back to the author's website, and essentially treat others' text as you would hope others would treat yours. Most people want their original work shared, and appreciate getting credit for it.
Images and graphics should be treated more carefully. If you will directly benefit from using an image, you must have permission to use the image. However, if someone has submitted the image to a public photo gallery and you will be simply promoting the artist's work, then just be sure to provide full credit and a link back to the artist's website.
If you want to use a photo as a core component of your website, you certainly must have permission to use the image, particularly if you are going to modify the image in any way. All stock photo websites have "royalty free" photos, which means once you purchase the image you can use and re-use the photo as often as you wish. This is a great place to start if you are looking for good images for your website.
And search engines?
Actually, search engines have been known to penalize or ban websites if they determine their content is duplicated. In other words, if your website is just a copy of someone else's a search engine has no reason to include your site in its results. Also, if you create duplicate pages within your site--even of your own content--to create the illusion of a larger website, your listing rank can be reduced. Syndicated news and content you have delivered dynamically to your site is treated differently by search engines and copyright rules.
Have you ever wondered if your content has been snatched by someone else? Check out www.copyscape.com to see if anybody has "borrowed" your content. They also provide a flag to place on your site to warn people that your content is protected.