ARL has just released a brochure called “Know Your Copyrights” (PDF) which it says “gives faculty and teaching assistants in higher education an easy-to-scan explanation of when and how they can legally use intellectual property in their teaching, often without requesting permission or paying fees.”
I just gave it a quick read and I’m impressed. It covers educational use very well, and even touches on how to manage the rights of the things you produce, and all with a healthy library influence. There’s also a handy quick-reference chart near the end that is one of the best I’ve seen. My only gripe is that it occasionally commingles the law with non-legal guidelines without calling attention to which are which.
On the plus side, it’s released under a Creative Commons license which specifies that derivative works are fine as long as they include attribution and aren’t commercial.
[Update: Just to clarify, the guidelines I mentioned aren't "illegal," they just aren't law. For example, when the guide says that copying a timely article when you've just found it and don't have time to seek permission is generally accepted as fair use, this directly references the "spontaneity" section of the Classroom Guidelines, which were never adopted as law but are nevertheless widely accepted by publishers. Nothing in the legal code says anything about time crunches.]