Update 1/05: I now have a much better discussion of this on my personal digital photography/iPhoto page.
Merging iPhoto Libraries, the easy way:
1. Make sure you have enough free space two times the size of your library to merge in on your hard drive.
2. Using DiskUtility (in OS X 10.3), create a disk image large enough to hold your library once. Name the opened volume 'iPhoto Library'.
3. Using TextEdit, create a file called IPHOTO.XML and place it inside the library. The file should contain this text:
(xml removed because it's invisible in blogger -- see original posting)
4. Copy your library to this disk image and name it 'iPhoto Libary'. If you're done, the folder structure should look like this:
iPhoto Library (Disk image)
\- IPHOTO.XML (Textfile)
- iPhoto Library (folder, containg all your iPhoto stuff:)
- Albums (folder, pretty empty)
- 2004 (folder, containing subfolder for each month day)
- ... (many more pictures)
- Data (folder, containing files '1.attr' and '1')
- Thumbs (folder with Thumbnails)
5. Inside Disk Utility (in OS X 10.3), choose the menu 'Images > Convert...' to create a read-only copy of your disk image.
6. Mount that new image and iphoto is happy! drag-and-drop the CD onto your library to import your photos!
This great thread described several techniques, this one resembles the iPhoto image technique I described some time ago. What's new here is the creation of the xml document!