It seems to me that the only sensible solution to the image problems we being discussed is the tagging of images as "GNU FDL" or "fair use".
The remaining question I have is whether we should also support "special permission" images (that are not free for use outside Wikipedia).
If the only way we can illustrate a topic is by using such images (or other media), then I think we should do so. Provided we have a mechanism by which reusers of our content can avoid downloading them, it doesn't seem to be a problem. I do, however, recommend we accept their use only if it is the only way to provide such images for an article.
One point WRT "special permission" images is the minimum rights we should require before accepting it. Should we require the ability to reproduce the image in paper or CD editions? The ability to use in other Wikimedia projects (such as history textbooks and the like) perhaps?