I am starting a Neighborhood Watch group. Would it be legal for neighbors to post pictures to our Neighborhood Watch web page of cars/people that seem to be out of place or suspicious ?

This is a tricky area. I would suggest that you speak with an attorney before you go posting pictures of what you consider suspicious cars or people on a website. There may be some legal ramifications. You can locate an attorney through the attorney locator on Lawinfo's home page at http://www.lawinfo.com/. Some do offer free consultations.