The iPhoto ReadMe states the following key improvements:
email your photos using Apple Mail
adjust brightness and contrast to improve the appearance of your photo
retain and display EXIF data (image and camera information about each photo)
automatically create an album by dragging a folder of photos into the Photo Library list
import directly from a Photo CD or Picture CD
import a group of photos as separate film rolls by dragging a folder with subfolders into the photo viewing area
set your desktop image from within iPhoto
set your screen saver from within iPhoto
iPhoto crashes with the number of files I try to pour into it. I have thousands of large images. Plus, I have so many sub-folders to sort the images, it is unable to categorize them for me. Too bad, looks nice.
When browsing for photos after selecting "import" from the File menu some of the directories are not displayed or cause iPhoto to crash if there are too many photos in them.
Large photos seem to also cause the program to crash frequently.