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While there's more you can do in iP5 than in iP4, PE3 is an excellent upgrade to PE2, and my personal opinion is that PE3 is still very much a useful utility - it is a lot more powerful than iP5. However, many users who just do garden-variety photo cleanup will find iP5 to be more than adequate and won't need PE3.
 
I have to agree; it's much more powerful, and (on my 20" iMac G5 at least) much faster for doing the same edits.

For the average user, iPhoto's tools will probably be enough though.
 
Diomedes said:
I haven't explored all of iPhoto 5's features, but do its new features reduce the value of Photoshop Elements?

Exploring all of iPhoto 5's features will take a few mintutes. Discovering and using all of Photoshop Elements 3's feature will take weeks, if not months if you are really trying.
 
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