Well, the main question is do you want to use iphoto to organize your photos or organizer? You must choose, sooner or later. If you want to use iphoto, don't use organizer and vice versa, or you'll just make yourself crazy.
NEVER, never, never try to poke around in the iphoto library from outside iphoto. That is the fastest way to corrupt it and lose all your photos, which is why PSE doesn't make it available via File>Open.
If you want to keep organizing your photos with iphoto you have two options:
1. Set PSE as the external editor for iphoto in the iphoto preferences. When you edit your photos in PSE, don't change either the name or the format (you may need to set the editor preferences>on first save to save over existing file) and iphoto will remember your original plus the most recent set of edits. However, this doesn't work quite like versions in the organizer. To get back to the original you must revert and lose the edited version.
2. Export a copy of the photos from iphoto, edit those copies via File>Open in the editor, make all the changes you like, and reimport the edited copies to iphoto as new files. This lets you save as many different states and versions of your edits as you like.
Thanks Barbara, for taking the time to respond with good advice....
while option 2 seems to be the way to go to keep using iPhoto, it seems to be more aimed at editing and not so much organizing?... not too keen of going into the exporting/importing business.... (sounds like George Costanza....)
iPhoto really is pretty lame when it comes to organizing the library of photo's isn't it?.... I've heard of 'Light Room' which has been recommended by a friend.... and also seen another product $$.... iPhoto Library Manager by fatcat software, but reluctant to fork out for something else that doesn't quite work.... not sure if anyone can recommend these products?
So, if I wanted to make PSE the default photo app.... I'd need to....? export all photo's then import to PSE?... or just do the menu 'import' using PSE then delete the iPhoto library?.... I wonder how this affects my time machine which backs up to time capsule?....
What's your experience with PSE organizer? Does it do everything you want?.... is it the ants pants?.... lol....
Personally, I dislike all assset management software such as organizer, iphoto, lightroom, aperture. I prefer a simple browser like bridge.
If you think you want to use organizer, I would export a few images and make a new catalog, then try using just organizer (not iphoto) for a while to see what you think. There are advantages and disadvantages to any program. You just have to find the one that works best for you.