A Google penalty happens when Google's search engine's algorithm detects some kind of trickery being used on a website. Some webmaster's (and quite a few SEO companies) rely on trickery to manipulate search engines into thinking their websites are larger and more popular than they truly are, all in the hope of achieving better search engine ranking.
When a search engine like Google detects something that violates their published guidelines for legitimate websites, they will do one of two things — they will either penalize the website by lowering its search engine ranking, or kick your butt to the curb and drop you totally.
If you repeat / duplicate entire pages of content on your website, you run the risk of incurring a duplicate content penalty from Google and suffering lower search engine ranking as a result — or possibly having your website removed from their database entirely.
Now to what you are talking about...posting rss feeds to your blog / website is fine imo. Posting original content is a sure way to rise among the search engines thats for sure. But you are not going to get dinged for posting excerpts from articles. If you do use someones content for your website I would first ask for permission, and then place a link back to their site within the article. Nothing worse then someone copy and paste an entire article with no thanks, or links to the original author.
Google really has no way of finding out who did the original content. It could have been in print and someone typed it out...doesn't mean that now they hold the rights. So that is where website services such as www.copyscape.com
come into play. But then again all they do is search the web using 'search engines' to find duplicate content, or what appears to be duplicate content and report it back to you. You still need to sift through it all and determine whether or not it is viable. At least it is free...well the basic service is.
Now about people using / thefting your material...that is an issue. It is really a hard sell...this being the internet and all, where anyone can do anything. Copy and Pasting websites really get on my nerves. Especially when they make tons of cash using Google adsense...grrrr!
Did I shed any light...or did I just ramble?