At one time if you wanted to move your iPhoto Library to a location other than the Pictures folder within your user's folder, you had to leave an alias of it behind in the Pictures folder so iPhoto could find it. No longer.
With iPhoto 4 all you have to do is move the folder wherever you like and then fire up iPhoto. When you do, up pops a dialog box that reads:
Your Photo Library was not found. Do you want to find your Photo Library?
accompanied by three buttons: Quit, Create Library, and Find Library.
To complete the connection, just click Find Library and navigate to the new location of the iPhoto Library folder.
Yeah, I know, ho hum. But you can put this dialog box to better use. How so? Well...
You know that with iPhoto 4 you can view, via Rendezvous, the photos on another Mac that's squatting on your local network subnet. The problem is that you can't copy those pictures from that networked Mac to your local Mac. Drag a photo from the shared library to the Desktop and you get a thumbnail rather than the full picture.
But suppose you mount that Mac's hard drive on your Mac, move the iPhoto Library, and, when asked to find the library, you navigate to the iPhoto Library on that networked Mac? As far as iPhoto is concerned, those pictures are local, meaning that you can copy full images from the library to your Desktop with a simple drag and drop.
Should you care to revert to your old library, just quit iPhoto, unmount the networked drive, and launch iPhoto. Once again you'll be prompted to find the iPhoto Library. Just point iPhoto to your local iPhoto Library folder and you're back in business.
Note that in order to use the iPhoto Library on the other Mac, you'll need permission to access that Mac's Pictures folder.