Gary - There has been a quite a bit of discussion that I've read about the iBooks Author software you are referring to (I think). From what I gather:
1. Apple does not claim copyright of your images and or your book. They explicitly say so here:http://support.apple.com/kb/HT5071#3
However, the EULA for the software was sufficiently vague that many people thought they were claiming to own the copyright of the book.
2. You are only limited to selling/distributing through the iBooks store if you sell the work. If you give the book away for free, you can distribute however you want. This makes sense - Apple wants its cut of any money you make using its free software.
EDIT - looks like Apple changed their EULA from its initial form. See:http://www.litigationandtrial.com/2012/01/articles/attorney/trademark-copyright-infringement/apple-ibooks-author/