if they aren't giving out mortgages how are they making their money? are they doing secured loans? home equity loans? and how is the mortgage market working right now - is it that decent lendees are scarce and banks are competing for those few lendess, therefore giving the good lendees good deals, or are banks just now giving any mortgages out right now and waiting to see what'll happen i;e. bailout or not?

A Bank's primary source of income is from banking and investment. They still do mortgages. They have just tightened up the risk they will expose themselves too.

I thought placs like WaMu had stopped doing mortgages alltogether?

It's not that banks have stopped lending money, it's that wall street isn't buying mortgage backed securities like they used to.
Banks have depositors, credit cards,servicing and car loans like they always have.
FNMA and Freddie Mac have raised thier standards of what they will and will not buy and placing premiums on rates to offset some risk.
Until the credit markets make a comeback on Wall Street mortgage lending will only get more restrictive.

They've reduced their risk. However, banks have other revenue streams (albeit small) beyond mortgages.

You'd be surprised to see how much revenue even small community banks make just on ATM fees. It's more than one would think and generally well beyond the costs of running said ATMs.

They have been investing in oil. And no, I am not being a smartass.

they stopped taking loans from brokers.... because they foreclose more often than retail loans.
They are still lending. Just tighter guidelines like everyone else.