Users don't have access to other users' home folders, by default.
Once again, you are wrong. Default permissions on the home folder give read permissions to everyone, so that the public and sites folders are available. Access is restricted to the other folders.
Rather than circumvent that by changing permissions (which would make all movies and photos in those folders available to all users, which may not be desirable),
You aren't circumventing anything. Permissions are there to change. And I never stated that permissions be changed to allow everyone. OS X supports creating groups (easily via Account Preferences), so creating a group and giving that group read access allows you to target who should have access. It comes down to what the user needs, but the proposed solution may not be the best one.
it's best to use the Shared folder, since that's what it's designed for. That way, you can selectively share any files you want, while keeping secure those files you may not want to share.
The Shared folder is not best used to keep your entire library. Sharing a few files, sure it makes sense. But moving libraries, such as iPhoto there is a bad idea.
For example, lets say they get a new Mac and use Migration Assistant to migrate their data to it. If they migrate their user account and not /Users/Shared that data may not be moved. This hinges on whether or not they choose the right options during the migration.
Another problem is resource and file contention when using fast user switching.
But again, tossing a few files to be shared is one thing, tossing a large part of a users data into another location is pointless and is a recipe for disaster. Permissions are there for this reason. Keep the data where it should be and give access to those who need it.
Since the OP never stated that they want one giant iPhoto library that everyone uses, I don't see why some are recommending that path, but again, resource and file contention will be an issue even if this was the desired solution. In addition, there can be problems if the library isn't placed on a volume that can be set to ignores permissions (hint: the boot drive isn't one of those).
The OP can go either way, but the more elegant solution is to leverage groups and permissions to accomplish the goal of sharing their files. But, the process of sharing an iPhoto library is far more involved than dragging it to the Shared folder as recommended by you and others, and even my solution doesn't solve but this is because iPhoto libraries don't lend themselves to being viewed (easily) on a file basis.