The ideal caseIn an ideal world, people would only copy quotations, or things said by others that they like. For example, quoting a sentence from an author or public figure, quoting someone from their live speech somewhere (chances are, that speech will be copied by someone else too), an announcement, quoting from another blogger whom you find insightful etc. That is how quotes are supposed to work.
If that's the case, and you want to add such content on your site, then you can do it without fear, so long as you link to the original source. Credit should be given where credit is due. Just make sure you put the quotation in a block-quote tag, and everything will be fine.
People often ask, How will Google know whether it's just a quotation, or copied content that could get them penalized? Well, Google has some smart algorithms that will detect whether it's a quote or copied content. Besides, Google might check out your site manually. So don't worry if you've kept your end of the deal, and added a link to the original source and put the content in a block-quote.
When things go badLike much else, people are bound to exploit loopholes. Which is why Google is working on leaving as few as possible. It allows you to quote another site. But if you think you're gonna get away with copying an entire article as a 'quote', and then adding a link to the source, then think again. This practice will get you penalized.
Some bloggers also tend to excessively quote in their articles, adding little of value of their own. This will also result in your fall from grace in Google's eyes. So it's best to avoid such practices, and start creating valuable content. As long as you provide useful insights of your own, and quote reasonably with link to the actual source, there's nothing to worry about. Goo luck :)
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