I didn't lose any data during the upgrade to iLife '11, but I fail to see how it helps if you already installed iLife '11 on your Mac. It would only help for first time upgraders provided the update was on the Install DVD
This update addresses issues that, in extremely rare cases, could result in data loss when upgrading a library from an earlier version of iPhoto.
For detailed information on this update, please visit this website: http://support.apple.com/kb/HT4431