There are basically two types of images: images in the public domain and images that have been licensed and are therefore restricted for use in some way.
Public Domain Images: Are works that are publicly available to be distributed, reproduced, manipulated, and changed; their intellectual property rights, or copyright, has expired or is otherwise not applicable. Works in the public domain still need to be attributed to their original creator. The benefit here is that the user does not need to check for a restricted license or apply the principles of fair use. However, it is still the responsibility of the user to verify that the image in fact in the public domain: use the copyright information on the library's website to be sure.
Restricted License Images: Are works that still hold intellectual property rights and are protected through a variety of licenses. In addition to attributing these images, you will also need to verify that your desired use for the image is compatible with the license restrictions held on said image. These images may be licensed through Creative Commons, or may require that you ask for permission to use the item.
First, find out what type of license the image has.The descriptions below are based upon Creative Commons licensing; proprietary images may vary.
The most flexible of the licenses; this allows you to do whatever you want with an image, as long as you credit the creator.
You can create new works from this image, as long as you credit the creator. BUT, you must license any resulting work with the same license as the original work was licensed under.
You can distribute this image, including posting it on a website or otherwise make it public, but you may not alter it or create new work based upon it. As with all other CC licenses, you must credit the creator.
Probably the second-best license to look for with regard to this class and assignment. This license lets you create something new based on the image, as long as you aren't using it for profit--and as long as you credit the original creator.
Same as immediately above, but you DO have to license your creation under the same terms as the original image license.
A fairly restrictive license, this means you can redistribute the image but may not alter it in any way. And yep, you guessed it. You must also credit the creator.
In some cases, you may wish to use an image which does not have permissive licensing. In these cases, you may find that your desired purpose for using the image is compatible with the principles of Fair Use. Fair Use is a "doctrine that permits limited use of copyrighted material without acquiring permission from the rights holders".
Fair Use is a set of four principles intended to guide ethical decision making about using images (or other intellectual property) that were not created by you. These principles include: Purpose and Character of the Use; Nature of Copyrighted Work; Amount and Substantiality of Portion Used; and Effect on the Potential Market for or Value of the Work. Unfortunately there is no right or wrong answer with Fair Use; all instances are determined on a case-by-case basis.
It is up to YOU as the user to determine whether your intended use ethically and legally falls under fair use; when in doubt, use a different image, or consult with a legal expert.
Need help deciding if your desired use falls under Fair Use? Try this decision map created by the University of Minnesota. There's also an excellent flowchart that guides thinking through whether something falls under fair use, also created by the University of Minnesota.