The article mentions that the guy is facing charges on the basis of California's Internet Impersonation law, so I suppose the ads he posted on craigslist were written in a way to make it appear as if the poor girl had posted them herself, i.e. he pretended to be her.

But say he didn't do that, but merely created lots of websites with embarrassing material, such as the "sexually explicit pictures" mentioned in the article: would that actually be unlawful, assuming he is the copyright holder of the pictures?

One would think it should be, but on the basis of which laws? He wouldn't actually be harrassing her in that case, would he, since websites are not addressed to her in particular. I imagine he would be covered by the First Amendment?!