I've purchased a few of their $1 author megapacks through Kobobooks - excellent value for short story collections, probably cheaper and easier than tracking down the individual works myself.
From their discussion forum at
http://movies.ning.com/ it appears they do take the time to track down agents and estates for permission as well as using public domain material, so they are complying with copyright, at least for the US (I'm not sure what the UK differences are DrNefario).
Edit: They also sell directly through their website at
http://www.wildsidepress.com/index.html