the purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes;
the nature of the copyrighted work;
amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
the effect of the use upon the potential market for or value of the copyrighted work.
There are no clear-cut rules for deciding what's fair use and there are no "automatic" classes of fair uses. Fair use is decided by a judge, on a case by case basis, after balancing the four factors listed in section 107 of the Copyright statute. The factors to be considered include:
So what is a "transformative" use? If this definition seems ambiguous or vague, be aware that millions of dollars in legal fees have been spent attempting to define what qualifies as a fair use. There are no hard-and-fast rules, only general rules and varying court decisions. That's because the judges and lawmakers who created the fair use exception did not want to limit the definition of fair use. They wanted it--like free speech--to have an expansive meaning that could be open to interpretation.
Most fair use analysis falls into two categories: commentary and criticism; or parody.
1. Comment and Criticism
If you are commenting upon or critiquing a copyrighted work--for instance, writing a book review -- fair use principles allow you to reproduce some of the work to achieve your purposes. Some examples of commentary and criticism include:
The underlying rationale of this rule is that the public benefits from your review, which is enhanced by including some of the copyrighted material. Additional examples of commentary or criticism are provided in the examples of fair use cases in Section C.
2. Parody
A parody is a work that ridicules another, usually well-known work, by imitating it in a comic way. Judges understand that by its nature, parody demands some taking from the original work being parodied. Unlike other forms of fair use, a fairly extensive use of the original work is permitted in a parody in order to "conjure up" the original.
From the Stanford Collection on Copyright and Fair Use accessible through the Stanford Libraries, which your link to the EFF refers to.