I dont think fancels hurt the real cels that 
much, if at all.  I have a cel that was recently 
repro'ed and sold on Ebay...for a much nicer 
price than what I paid for my cel I might add 
^_^;.  But, mine is still the real cel, the cel 
that was captured and actually seen in the 
anime.  Now, if I were to scan through Ebay, and 
see a fancel, or the real deal side by side, Id 
most definately go for the real cel.  Does it 
make me mad that this person produced a fancel 
from mine, or someone else's image?  Not really.  
I was under the impression that it's nice to ask 
first, but ehh, doesnt hurt me that badly.

I think fancels are a good thing, because in most 
cases people cannot find the images or characters 
they want.  And in some cases they cant afford 
them.  Nuriko is a prime case of that.  Cels of 
him are very rare, and when they show up they go 
for pretty high amts.  Fancels are a great way 
for collectors who cant find the cels, or cant 
pay the (insanely) high prices, to still have a 
cel of the character.  I know a few collectors 
who would rather have fancels actually.  I dont 
know a lot about the fancel bizz, but to me I 
think it's fine. EPS with all the CG anime out 
now....must get some made!