So, take any given classifieds directory. Whats the legality of automatically fetching a group of listings from it and displaying that on your own site? I would understand that grabbing articles and the like would be a no-no, but purely listings? I'm not so sure. What about if the site aggregates these listings themselves using RSS?
Read the T&Cs on the site before scraping them. The Yellow Pages in the UK for example explicity forbid it and even go as far as seeding their directory with false adverts to catch people doing this. RSS feeds are different as they are intended to be shared, it is the very reason for having them, however the aggregator should retain the links back to the original site
Not necessarily. Many sites provide RSS feeds for the sole purpose of having their visitors view the feed through a feed reader, allowing them to stay up to date on changes to the site. They don't automatically want or allow that feed to be used by other websites. Read the Terms of conditions of the specific site to make sure what you can and cannot do with the RSS feeds.
You should try ScrapePro that can scrape any web site easily and it has an API to fine-tune the scraping process.
If you 'repurpose' someone else's content without permission, you're infringing their copyright. Why would you think that adverts are exempt from this for some reason? Try publishing a Microsoft ad without permission and see what happens. As for thinking that just because someone else scraped it first it somehow makes it OK... sheesh.