Circulation and authorship of the image

Who owns the authorship of an image?

Some artists use the work of others to create their own for example (agdhf) and her use of flickr images to create a larger image. So who is actually the 'author' of said image??

Is this ethical? For some artists to take credit for other artists work? Interesting the learn that it should be considered acceptable for an artist to use the work of others if they use it in a different and new way, making it something different and new - making the seond artist in the process the author because they are the creator of the new work.

Interesting to know I could incorporate the work of another into my own.