Looks like this may have done the trick. The Apple Support board has been filled for months with complaints about major freezes in iPhoto 11. The issue many people had, including myself, was that iPhoto would freeze, sometimes for 5 minutes or more.
In fact, your whole Mac would become unresponsive. Then, after a while, things would return to normal. It was happening on some older Intel Mac Pro machines and some iMacs. The common thread seemed to be Macs that had a NVIDIA GeForce 7300 GT graphics card, but some other cards were implicated as well.
It got so bad that some people gave up on iPhoto completely and moved to Aperture or Picasa. Every update to either Snow Leopard or iPhoto got hopes up, but nothing seemed to help... until now. The latest update to Snow Leopard seems to have squashed the bug, and many people are finding the mysterious paralysis is now gone.
I tried iPhoto 11 myself today, and I could not trigger the lock up no matter what I did. So if you've been suffering from the problem, see if this latest OS update fixes the issue and give us the good (or bad) news.