It's a developing area of law. Just because the Ninth ruled one way does not mean that the rest of the country has to follow. Unfortunately (or maybe fortunately) the economics of suing someone over linking to a file just don't make sense in most situations, so it will probably be a long time before there are enough cases on point to settle this debate.
My original post was only intended to make people aware that their actions might turn into trouble and to strongly suggest that they look to Creative Commons licensed content instead of grabbing whatever they find, wherever they find it.
I normally advise my clients to minimize their risk or litigation. I certainly didn't think that would be controversial.
Also, as Copycense pointed out, I did originally say that the image appears to be in the public domain. I have since edited that line to better explain that the image was published in 1906 and can be found at http://www.loc.gov/exhibits/bobhope/vaude.html
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