Let's not beat around the bush. iPhoto 4 is better than iPhoto 2 in almost every way, and its performance is so much improved that if you currently use iPhoto 2, you should immediately ante up $50 for iLife '04 or, if you've been hankering for one anyway, a new Mac. On the other hand, if you rely on other programs to import, organize, and edit your photos, iPhoto 4 doesn't offer enough new to warrant the cost of iLife '04 on its own.
What's New and Improved? The iPhoto engineers deserve credit for speeding up iPhoto to such a great extent that it's impossible to quantify the performance improvements. Scrolling through a large iPhoto library no longer produces the spinning pizza of death, switching between modes happens nearly instantly, resizing the window fluidly is actually possible, and basically everything else works at a totally acceptable speed. The only actions I've found poky are occasional slowdowns between drawing a pixelated image and the final smooth one (mostly with very large photos) and occasional odd delays when Control-clicking albums to edit them.
Rendezvous-based photo sharing is probably iPhoto 4's sexiest feature, since many people wish to share photos with other people on their local network (but not the Internet), and it indeed works well for enabling someone to view and copy your photos. However, photo sharing is read-only; the other person cannot edit your photos, change titles or keywords, or use your images to build a book. For those activities, the photo must be copied locally first.
Perhaps my favorite new feature in iPhoto is photo ratings - a 1 to 5 star rating system that mimics the one in iTunes. Although I can't imagine someone expending the effort of distinguishing between a really lousy picture (that was somehow good enough to avoid being deleted) with 1 star and a somewhat lousy picture with 2 star, the higher star ratings simplify separating out your favorite images from the many plebeian pictures that have mostly documentary value.
iPhoto 4's addition of smart albums makes photo ratings useful. A smart album, like a smart playlist in iTunes (sensing a trend here?) populates itself automatically with photos that match the criteria you set. So, you could easily create a smart album that selects your favorite photos (4 or 5 stars), or even your favorite vacation photos (4 or 5 stars for photos taken during specific date ranges or in specific film rolls). iPhoto 4 includes some built-in smart albums that collect photos taken in each of the last four years, over the last few months, and the last few imports.
Smart albums can construct themselves according to a number of criteria, but as much as they're cool and useful, they suffer from one major problem - the need for manually created metadata. When you import a CD, iTunes automatically looks up the CD's title, artist, track names, and more from the Gracenote CDDB; any smart playlists you create use that information, along with metadata that iTunes generates automatically, like play count and last played dates. The only metadata you must assign manually is rating, although you can edit a track's ID3 tags if you desire. In iPhoto, by contrast, you must enter manually almost all the metadata you'll use with a smart album, and people are notoriously bad about adding metadata.
Part of the reason I'm bullish about ratings is that they're easier to apply than other types of metadata, thanks to omnipresent keyboard shortcuts (Command-1 through Command-5). These and other keyboard shortcuts work even when you're viewing a slideshow in iPhoto 4, so you can rotate, delete, and rate photos while watching, and you can do it all from the keyboard if you don't want to display the new slideshow controls. (Ironically, iTunes lacks these keyboard shortcuts, and I find myself using utilities to rate songs from the keyboard because of that.) Speaking of slideshows, iPhoto 4 can finally use an entire iTunes playlist instead of repeating just a single song (a painfully obvious failing that persisted into iPhoto 2), and they also provide a choice of Keynote-inspired transitions between slides.
People pining for a selective import in iPhoto (like Apple's Image Capture utility provides) will still be disappointed, but in iPhoto 4 selective import would be welcome primarily for quick imports of only a few select images from a large memory card. In earlier versions, many people (myself included) avoided iPhoto's all-or-nothing import to ensure that each film roll contained only related images. iPhoto 4 lets you create new film rolls from selected photos, and you can also drag photos from one film roll to another. It's a great feature, since film rolls are in many ways iPhoto's best organizational feature.
Along with these major features, iPhoto offers a number of smaller, but no less welcome, changes. You can now edit the titles, comments, or dates of a set of photos simultaneously, which makes fixing improperly dated photos a breeze and definitely makes adding metadata easier. A new Sepia button gives photos that old-time look. A new Collage book theme looks attractive, and Apple can now deliver books and prints to addresses in Japan and according to the iLife product manager, in several European countries starting 18-Mar-04. .Mac members now have the choice of a number of new HomePage themes (though I'd like to see some more elegant designs), and even better, iPhoto can now replace a HomePage album, so you need not login to .Mac to make changes (although iPhoto re-uploads the entire set of photos rather than just the changed photos or titles).
What's Still Missing? All that sounds great, so what's my beef with iPhoto 4? As soon as I saw the very first version of iPhoto, I was impressed, because Apple clearly understood what a consumer-level photo management program needed to do. But as much as iPhoto covered the necessary ground on paper, the application itself continues to suffer from glaring holes that have been painfully obvious from day one. I'm undoubtedly more familiar with iPhoto than just about anyone, since I've actually tested every function in every version of the program while writing my iPhoto Visual QuickStart Guide books, but the complaints I'm about to list aren't just my pet peeves, they're also the concerns I've heard from hundreds of iPhoto users in email and at talks I've given.
(As an aside, for amusing evidence that even Apple understands the importance of at least some these features, iPhoto's Help until today contained a document called "What's new in iPhoto 3" (it currently retains that title, but the content has been updated for iPhoto 4). There was no external release of iPhoto 3, of course, so this document must have been a wish list or been left over from a version left for the future. You can read the original text in TidBITS Talk.)
For many people, iPhoto 2's abysmal performance with thousands of photos required the creation of multiple iPhoto Library folders. Other people rely on multiple libraries to separate unrelated photos (work and personal pictures, for instance). iPhoto 2 provided only the most half-hearted capabilities for creating and switching among iPhoto Library folders. It was saved by a hidden Mac OS X shortcut: if you Command-Option-drag a file to any application on the Dock, that application will attempt to open the file, even if it's not that application's file. In iPhoto 2, if you Command-Option-dragged an iPhoto Library folder to iPhoto's icon, iPhoto would switch to that folder. Unfortunately, since the iPhoto team wasn't aware of this shortcut, they managed to break it in iPhoto 4. Now the best way to switch among iPhoto Library folders is via Brian Webster's free iPhoto Library Manager utility. Unfortunately, there's no easy way to merge iPhoto libraries; the best approach is probably to burn photos to a CD or DVD and import them (thus retaining keywords, which doesn't happen when copying photos via photo sharing) again from disc.
iPhoto Library Manager also provides a clumsy workaround for another glaring iPhoto 4 omission: the capability to share an iPhoto Library among multiple users of the same Mac. This points out a limitation in the concept of iPhoto 4's Rendezvous photo sharing as well. The problem is that for couples, photos are usually a shared resource to which either person can add titles, keywords, comments, or ratings. But iPhoto 4 doesn't make it easy for two people to work on the same set of photos from multiple accounts or multiple Macs. There are workarounds that involve external or network volumes (explained with detailed steps in "Take Control of Sharing Files in Panther") or changing permissions constantly (which is what iPhoto Library Manager does), but this should be built in to iPhoto. Apple is responsible for breaking everything apart for multiple users in Mac OS X; it's their responsibility to make sharing data between those users easy.
Perhaps the most troubling omission in iPhoto 4 is that it still provides no method of exporting metadata you create, which is yet another reason many people don't bother putting the effort in. Think about it - more so than any other data you create, you want your photos to last forever. They'll be even more important to you in 50 years than they are now, and you should be able to pass them along to your children or to institutional archives when you die. Ignoring the silly question of whether Apple will update iPhoto for the rest of time, the near term answer to this problem is an export capability that lets users retain any metadata they've applied.
Where should this metadata live? There's a specification called EXIF (Exchangeable Image File) that many digital cameras use to store metadata in the JPEG files they create. Perhaps there are technical concerns surrounding the use of EXIF data, but on the face of things, Apple could use it for storing titles, ratings, and more.
Smart albums are useful, but for many people who have become accustomed to hierarchical filing systems such as used by the Finder, iPhoto's lack of hierarchical albums is bedeviling. Sure, you can concoct a smart album to hold all your vacation photos, but you can't have a Vacation Photos album that contains sub-albums for each vacation. iPhoto has done a good job of mimicking iTunes; perhaps it should look at the Finder next.
There's one final omission made all the more egregious by comparison with the Finder. Perhaps the primary point of a graphical interface is direct manipulation of objects, yet iPhoto still refuses to allow direct naming of photos or film rolls, as you do with files and folders in the Finder or with songs in iTunes. Instead, you must select the item in question and then enter the name in the info pane. You can apply ratings directly, through a hierarchical contextual menu, but adding keywords and changing dates must also be done at arm's length from the actual target of the action.
Development Sloppiness -- Apple fixed a number of bugs in iPhoto 2 that I ran across while writing about it, but they've managed to introduce an entirely new crop that you may find irritating. If you set the option to place most recent photos at top, creating or modifying film rolls reverses that setting until you open and close iPhoto's Preferences window. Control-clicking a photo in a separate image-editing window displays a contextual menu of editing commands, of which Sepia is always disabled. (Ironically, in iPhoto 2, Enhance was always disabled in that menu, though it works now.) If you duplicate a photo that you've edited in any way other than rotating (and sometimes even rotating), duplicates made of that photo do not get "copy" appended to their titles, making identification of the duplicates hard. You can delete photos from the Last Months and Last Rolls albums just as you would from the Photo Library, except for dragging to the Trash album, which works only from the Photo Library. And lastly, if you select any album, iPhoto shows you the amount of disk space the album takes up... except for the one album whose physical size on disk matters most: the Trash. (Work around this by selecting all the photos in the Trash album; the info pane then shows you the amount of disk space used by the selection.)
These aren't subtle bugs - I've found them merely by monkeying through iPhoto's interface while updating my iPhoto book, and I can't believe any of them would be hard to fix. Perhaps we'll see a 4.0.1 release that will fix these bugs, though I'm not holding my breath, since there was no 2.0.1 to fix the similarly obvious bugs in iPhoto 2. Looking forward to the next major release of iPhoto, I'm more than happy to do this with a feature-complete beta release so I can report the bugs directly to Apple for fixing rather than telling the world about them in the release version and attempting to come up with workarounds for my book.
In the end, I'm left frustrated by iPhoto because it constantly displays glimpses of greatness that are then promptly undercut by obviously missing features and boneheaded bugs. I expect better from Apple, and as I've done with the last two major releases of iPhoto, I'll hold out hope that a full year of development time will allow the iPhoto team to make great strides for iPhoto 5.