I hope you found "A Fair(y) use Tale' as informative as it was entertaining.
It does give a fairly good overview of the concepts underlying Copyright law, It is probably a good idea to run through what I see as the essentials!
Copyright protects creative works. The opposite view of this, is that copyright does not protect things that are not creative. A fact is not protected by copyright - so no royalties for 'the sky is blue'. One interesting twist of this concept is that a person who makes a copy of a work, without the authorization of the copyright owner, cannot claim the copyright on that work. The Mona-Lisa has been in the public domain for centuries - if you take a photo of the Mona-Lisa that is nothing more than a reproduction, then your photo is in the public domain as well. If your photo of the Mona-Lisa has some new creative element to it - special lighting, or some added framing, then you could claim copyright for THAT photo.
To infringe copyright, you have to copy something. Copyright law regulates who can make exact reproductions of works. Before something can be protected by copyright, it has to be recorded or 'fixed' in some form. As an example, a sponanteous dance that is not recorded is not protected by copyright. If you wanted to copy that dance - how would you do it?
Copyright protects the expression of an idea - not the idea itself. This is probably one of the most important concepts, without it copyright would strangle any cultural development. Think of how rich the person who came up with 'boy meets girl' would be if an idea could be protected by copyright!
There is an amusing anecdote floating around on the web. An author contacted W.W. Norton requesting guidance on what portion of a W.W. Norton book could be quoted without seeking permission from Norton. The response was that any use of text from a Norton publication would require permission. Does this mean that using the word 'THE' requires permission from Norton? The answer of course is no. Copyright protection does not apply to 'insignificant' portions of a work.
So, with these concepts in mind...was A Fair(y) Tale legal??