I bought iLife '05 today and have started to evaluate the potential of iPhoto's new features. Having seen the video of Steve Jobs doing a slick promotional demo at MacWorld in January I was eager to try out this significant upgrade. So far the new tools seem to work extremely well. iPhoto will not replace advanced image management software like Photoshop but it does the basic editing extremely well and very quickly. A good example is the Straighten tool in the Adjust window (which in itself is a portent of what we can expect from Tiger (OS X 10.4) with a translucent dark grey "dashboard" dialog box).
Click on the toolbar and slide the slider to left or right. A square grid switches on, great for aligning horizons, verticals, etc., and the image rotates and zooms so that the exercise automatically includes a crop when the image is judged to be in the right position. The tool is sensitive and can be stepped one small increment at a time. Then, when you move on to the next image iPhoto saves the changes automatically (tho' you can reset your editing and move on without any changes). It has occurred to me that making backup CDs of image downloads would be a good idea before any editing is done.
The photo book options have been greatly enhanced. Personally I had never considered this option before but the variety offered has made me think again. So I chose an album theme, selected images and then put together a book using full layout control (there is also an autoflow option to speed things up and this can be edited in order to fine tune the layout and sequence of the images). The book used a simple "theme" but other themes allow for annotation of individual images as well as an introduction. Very intuitive, very easy and very pleasing! I don't have an account set up for printing so I have not sent the files off but the pricing is reasonable. This appears to be a great way to obtain hard copy of the best shots! In many ways this is the final piece of the digital photography puzzle.
Another interesting option is the calendar. Because digital cameras record the date (and many other parameters) into the file, iPhoto can sort images chronologically and it is easy to open the calendar and scan what was taken on a particular date. Of course this doesn't work with scanned images from slides as the file creation date will reflect the date the slide was scanned.
So, at first look, yes, iPhoto seems to be an excellent application.