iPhoto '11 presents two ways to view your library: by thumbnails of every photo or by events. A useful organizational tool, an event groups photos taken during a certain time period. Each event is viewed as a thumbnail, and when you mouse over that thumbnail, you can skim through the photos it contains. Viewing by events in iPhoto makes it easier to scroll through your photos, particularly when your library contains thousands upon thousands of photos. iPhoto creates events as you import photos, and you can set parameters on how it goes about doing so.
You have four choices on how iPhoto creates events. Via iPhoto > Preferences > General, you you'll find a menu item labeled, Autosplit into Events. The choices are: One Event per day, One Event per week, Two-hour gaps, and Eight-hour gaps. The last two options are for serious photographers who take hundreds of shots in a given day. For most, creating an event per day or per week will suffice.
You can merge and split events, should you, for example, import a week's worth of vacation photos and find you created seven separate events. Simply highlight the event or events you want to merge into another and then drag and drop them on top of the event with which you'd like to merge them. (To highlight multiple events that are next to each other, use the shift key. For events that are not next to each other, use the command key.) To split an event, open an event and highlight the first photo that will be the first photo in the new event. Then under the Events menu option on the menu bar, choose Split Event.
You can also move a photo or photos from one event to another. To do so, highlight two events and then double-click on one of them, which will open both events. You can then drag and drop photos between the two open events.
Lastly, you can choose the photo in an event to be the image to appear in the thumbnail. The cover art, if you will. Or as Apple calls it, the key photo. Drag your cursor over an event thumbnail to skim through the photos. Find one you like and hit the spacebar to assign it as the key photo.