OK, I just got off the phone with the legal dept. of my local public library and he said under the Fair Use Act that yes, you can check out books, be it cookbooks, carpentry books or even quilting books and magazines and use the patterns from these for personal use. He didn't know, however, about photographing it and posting it online. He said he personally wouldn't recommend it so you don't end up a test case for a lawsuit, however, he said as long as you referenced the book/mag/designer/creator you should be ok. He was also unclear about "derivitives". He also recoommended contacting a copyright lawyer directly and get their take on it because there is just too much uncertianty regarding it and he didn't want to misdirect me.
He also reiterated you cannot check a book or mag out of the library and make copies of it to share with friends or groups and that you can't mass produce any item from said book or magazine. This is a given, we've already established this.
He also did not know any of the particulars regarding showing said quilts in fairs or competitions.
This is from the legal dept. of my local public library. If you will notice, a lot of this is common sense information and some of it is "in his personal opinion". Again, his recommendation is to contact a copyright lawyer and consult them. It could be on a case by case basis. I may try this next. Will let you know what I find out.