While I tend to use Adobe Photoshop for editing photos if I want want to be able to REALLY manipulate images I still prefer to use iPhoto to make smaller correction and accomplish basic changes (red eye, brightness, contract, etc). Take a look at the following three images for some of the interesting effects possible with the simple to use iPhoto.
Original photo - Note that the colors are really washed out and there are no clouds to make this a very interesting picture. The only thing that this lighthouse photo has going for it is the "subject" which in this case is the perfectly placed sailboat.
iPhoto Fix Step One - Hitting the photo with a rather big stick I cranked down the brightness, sharpened the image and increased the blue color saturation.
iPhoto Fix Step Two - Unfortunately, even with all of the prep work in the end the sky really is drab and colorless and doesn't add anything to the photo so for that reason on my last step I removed as much of the sky as possible using the matte tool. Additionally, since the colors really weren't that fantastic I also gave the photo an antique finish.
Now obviously this photo has other issues that to be resolved go well beyond the limited capabilities of iPhoto, however, for simple edits I hope I have shown that iPhoto is worth further exploration. Did anyone notice that the third photo wasn't the same as the first two?