Hi,
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If so, where should my pics be - in iPhoto or the "Pictures" folder? If they are supposed to be in one & not the other, why are both options there/offered?
Bazzy!
Generally speaking, Apple wants you to store (nearly) all your photos 'inside' iPhoto and that is way things are designed. I say "nearly" because I'm sure there are some exceptions.... but basically, photos should live inside iPhoto.
iPhoto is a Digital Asset Manager (DAM) and is designed to handle all the tasks that people commonly do with their images within iPhoto itself. There is an iPhoto library (a package) that holds both the folder structure with all the images themselves, and also the database that keeps track of what happens with the images.
In the normal course of events, once an image is "imported" into the iPhoto library it is never written to or changed. All of the metadata (keywords, albums, etc) are written to the database. More importantly....
all of the iPhoto editing changes are also written to the database - not the image itself. The final edited image is only "created" when you export the image. (Dragging the image from iPhoto to the desktop is an 'export'). During the export the editing changes recorded in the database are used to create the 'final' image that is exported.
I believe that if you create a "duplicate" within iPhoto you are only creating a duplicate database entry, and not a copy of the original image. This means you save a great deal of space because the text entry is much smaller than a 2nd full sized original image. You can treat duplicates differently.... i.e. make one BW and leave the other colour. Duplicate the BW image so now you can crop one square and the other into a near-panoramic format. Still one image on disk, it's just entries in the database.
The one exception, near as I can recall, is that if you invoke an external editor from within iPhoto then the finished-edited image itself is saved into the Library (i.e. you will have two physical versions now, one the original untouched iPhoto version and the newly edited version of the image. There will be separate database entries for each image, though they are linked so that they will appear in the same albums etc).
I've moved from iPhoto to Lightroom (Lr) primarily (and Aperture for the books.) However, the theory is the same. Sometimes it is just easier to export an image out of Lr (or iPhoto) and do something with it outside of a DAM. In this case, once I'm done with it, I either delete it or import it back into Lr. I don't have images (generally) that exist outside of Lr. I can find everything with Lr, and all my images are available through a single interface. I'm never trying to remember where something is... I just search for it or open up the Album (Collection) where it resides.
Hope this helps.