I was under the impression that it's legal to embed images of characters from fonts (i.e. I could scan and use a '&' set in Garamond from some print), it's just not legal to embed the 'program code' of the font.

Correct, but then when a user hits Cmd+Plus to scale your page up the fonts will scale nicely but your image-based ampersands will be blurry.

I don't know about Garamond specifically, but copyright applies to images also, and some fonts are copyrighted. In fact, with the automatic copyright that came in with the copyright changes in the 1970s, all modern fonts are copyrighted. Many have been released for public use, but if you want to use an unusual font in your work, you should check to make sure that it is available.

It varies by country, but in the U.S., typefaces are explicitly excluded from copyright: http://www.loc.gov/cgi-bin/formprocessor/copyright/cfr.pl?&#...

Computer fonts are copyrightable as software, and particularly novel font shapes can register a design patent. But in general there's no legal barrier to redistributing images of type specimens (or even producing a clone font by tracing the outlines).