I guess it's not surprising to see big names suing each other over this stuff. I guess I was referring to the little guys (like us) using random open source packages.

Anybody know of a case more along the lines of '[random PHP image rotation library from SourceForge] vs. rtatr.com (rotate your images online!)'?

I highly suggest you read the GPL one more time. If you're hosting a web app that rotates images for people, that random library is running on (effectively) your server. You're distributing the end, not the means. The GPL does not restrict you in this regard. If, however, you wanted to package up your app ('Run your own image-rotation service!') and distribute it to folks, you have to release it under a GPL-compatible license.

http://www.gnu.org/copyleft/gpl.html

To “propagate” a work means to do anything with it that, without permission, would make you directly or secondarily liable for infringement under applicable copyright law, except executing it on a computer or modifying a private copy. Propagation includes copying, distribution (with or without modification), making available to the public, and in some countries other activities as well.

To “convey” a work means any kind of propagation that enables other parties to make or receive copies. Mere interaction with a user through a computer network, with no transfer of a copy, is not conveying.

The GPL (v3, at least) restricts conveying.

GPL v2 states the following:

2. You may modify your copy or copies of the Program or any portion of it, thus forming a work based on the Program, and copy and distribute such modifications or work under the terms of Section 1 above, provided that you also meet all of these conditions:

So long as you do not distribute your modified copy, there is no need to abide by the conditions following that section.