I was under the impression we could not use copyrighted material, but I noticed alot of the steam workshop races are copyrighted materiel i.e. Warhammer and Star Trek. Can we grab whatever photos on the net we want and use them on custom races we upload to the workshop? If not, are there any good places to get free to use images?
It is not technically legal to use copyright-protected material without first obtaining permission unless the manner in which you are using that material qualifies as 'fair use.' I am not going to attempt to provide you with a definition of fair use; copyright law is not something which I am particularly knowledgeable about, and anyways 'fair use' can be rather vague, subject to interpretation, and variable in application, as well as likely being at least partly dependent upon where you are. If you are sufficiently concerned about the legality of using some set of images in a mod, I suggest contacting whoever owns the images to seek permission to use them, or go to a legal specialist for advice (you may need to pay to get this).
As far as why you see copyright-protected material showing up in mods, I will say that the modding scene tends to follow the philosophy of "it is better to seek forgiveness than permission." Unless you have obtained permission (preferably in a form which provides you with a record you can point to in case of legal issues; your word that permission was given to the owner's word that permission was not or was retracted is not likely to go well if someone decides to take legal action against you) to use the work of another or unless that work is in the public domain, you are at best in a 'grey area' which may (or may not) fall within the ill-defined region known as 'fair use.' You are generally more likely to be within 'fair use' the less of the original material you copy and the more of it you alter. Steam's recent attempt to monetize mods and any renewal of that attempt may cause the owners of copyright-protected material to pay more attention to the modding scene and be more aggressive about potential copyright infringement.
As far as obtaining free to use images goes, I would suggest searching for 'public domain images,' possibly with additional adjectives on 'images' (e.g. "public domain spaceship images"). Websites maintained by a professional organization should provide some form of citation for the images they use and the citations can provide some indications of whether or not the image is in the public domain (hint: "reproduced with permission" most likely means that the image is not in the public domain). Governments and government organizations may have image sets which are in the public domain. Professional and governmental organizations which maintain websites may also include one or more pages on their site covering the use of images and other material available through them (for example, NASA provides some guidelines for using material from its websites which can be found here, though note that this is a set of guidelines, i.e. there may be some material which follows different rules). The modding pages for other games can be a good place to start looking, as well; sometimes modders will make some of their work available for use by others, though before you take it make sure that whatever permission was granted actually applies to what you're doing; I've seen some mod ressources made available for use only within the same game, others with use permitted so long as the creator is credited (which you should do anyways if you're using some significant amount of another person's work, such as a full ship model or a only very slight modification thereof, though providing proper credit does not in itself make the use of that person's work legal), and some with permission to use however you want with or without credit.
