For us, we purchased big batches of royalty-free images through various places, including ebay. Some are cheap, some are more expensive. One of our partners also supply us with many images.
You can just do a quick search for "royalty free stock images" and you'll get many entries, though many will cost you. (Royalty-free does not mean "free," it just means you don't have to pay license fees for it, only a one-off price.)
Probably the best site for absolutely free images is Wikimedia Commons:
http://commons.wikimedia.org/wiki/Main_PageActually, I think I should make a thread about this on the Little Reader board too.
KL