Hello I was wondering if I were to have a spritesheet that I got from the internet and changed the character's appearance dramatically(ex. changed the human character into some sort of troll monkey) that would still be refered as stealing, i.e copyright infringement especially if it's going to the xbox community games for sale, right? My friend says otherwise, saying it's perfectly okay as long as you mention the basis in which you made your spritesheet from. Who's right? Or can someone go into more detail about the issue? Thank you for your time.

Asking about copyright infringement sure sounds like asking for legal advice. And giving legal advice is not allowed on these forums. Sorry.

That's one of the cases where the forum mods (I'm not one of them ;-) will tell you: You are not allowed to ask legal questions here on the forum. Please ask your trusted IP-lawyer instead. The advice we can give: Do not trust advice other than from a legal professional, because in a court of law, the argument "but my friend said it's OK" will not hold much weight... :-)

Doc

Edit: Ugh, Catalin was faster...

If you need to ask, chances are that it's not a good idea.
If your copied sprite sheet contains art that was in the original, then it is copied from the original, which seems to be what copyright is there to protect.
If you're planning on changing all the sprites, you'd be much safer off just re-drawing all the sprites from scratch on your own sprite sheet.
And whether any particular action would make you more or less liable to be prosecuted, civilly or criminally, is a matter that you can only properly ask of a law professional licensed to practice in your place of residence.