I was thinking of starting a news site, but using news articles from other sites and compiling the best stories into my site. Would this be legal if I gave credit to the writer? Or would I need to link back to the original article too?
credits + link would work. I've written articles that are published on several sites with a link back to my site and i wouldn't want peole to use my articles without a link back so i'm guessing they won't also.
No. It's not legal. Anyone telling you it is is just clueless. Links and credit don't mean you won't get sued for copyright violations, and news is no exception. That's why there are fees associated with using AP and other content. If you want to publish it you'll have to buy a license or get permission from the copyright holder (which isn't always the author, especially if it's a large news site). What you can do is take press releases and use them to create your own posts for news - but even then, it's smarter to use them as a source to write your own and not just republish them.
Copyrights means that the rights to republish the content are also reserved. Though you may attribute and include a backlink to the original source, that no way give you a right to 'republish'. All said, it is illegal.
Most webmasters won't be happy to see their entire articles copy/pasted even if you provide a backlink. It won't do any good for your site either because of the Google duplicate filter. I would suggest you to rewrite the articles and in some cases still linking to the original source. That's the best practice.
Actually "best practice" would be writing something more original, or citing the news article but writing your completely unique commentary on the news story. Simply "rewriting" can still amount to a copyright violation:
Whenever you are interested in an article or story from another site you HAVE to have permission. Some sites allow you to use there content some don't you need to read the copyright. For example, Wikipedia, you are allowed to use any content on wikipedia all you have to do is link back to their site. Just go to the bottom of the page on each site and read the copyright.
You're kidding, right? Unless they've completely changed things and I don't know it yet, Digg doesn't simply republish others' content as their own... they publish summaries from the person submitting it and simply a link to the actual article on the owner's site.