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I've done a number of sites where clients have given me their own photos, eg. carnival crowds, kids at village fetes etc. The people in the photos weren't asked for permission to take their photos so what would happen if they saw themselves/their children on a site and complained?
AFAIK pictures of people taken in public are considered public domain. News casters don't have to get releases from people walking by when they are live on site. I think it depends on the situation. Are the pictures close ups of people are just pictures of people doing something at a place of business? I really have not had much experience with this so hopefully someone else may have a more definitive answer for you.
Here is a thread that may help: