It seems that the audio recorder would be a perfect way for students to do a report about a book and post it. Is it possible with copyright laws for them to include illustrations from the book? Where would be the best place to create something like this?
Good questions here, Geraldine. First I'll address the platform issue, second copyright.
In terms of where to have students create and share multimedia book reports, you certainly CAN use Audacity and PhotoStory as we have in the COV workshop. You also might consider creating a free educator account on VoiceThread, and check out the "Great Book Stories" project which includes book reviews mostly created in VoiceThread. You also can certainly upload student book reports here to our COV learning community, or you could upload them to an education-specific video sharing side like Edublogs.tv, TeacherTube, or SchoolTube.
The copyright issue comes down to "fair use" requirements. As we've discussed in the COV workshop, we take the advice of the Temple University Education Media Lab and focus on how "transformative" the work is. When you use portions of a book, include a critqiue, and publish it for non-commercial, educational purpooses, you are generally created a transformative work or remix which WILL comply with fair use guidelines.