Whoever designed the photo deletion interface in iPhoto rather botched the job. The system in both versions of iPhoto I have used (’08 and ’04) has been confusing and very easy to use incorrectly.
When you select a photo in an album and hit delete, it gets removed from only that album, not the photo library. This is sensible enough, though there should be an easier way to delete the image from both locations. What is much odder is that when you delete a photo from the library, it doesn’t go into the Mac OS trash. Instead, it goes into a custom iPhoto trash folder.
What is really unforgivable is that if you go into the trash folder, select an image, and hit delete, it actually gets returned to its original location. There have been plenty of occasions where I have gone through the photos from an entire trip (probably hundreds of images), removing the botched and boring ones. If you then hit the wrong key while looking at the trash folder, they all jump back to their original locations, and you need to repeat the whole selection process.
It would be far more sensible for iPhoto to behave like iTunes. When you delete a photo from the library, it should ask if you also want to delete it from your hard drive. Then, there is no need for an independent trash folder. Removed images would either get taken out of the iPhoto file management system but left in their original hard drive location, or they would be put into the general Mac OS trash. It should also be possible to delete images straight from smart folders. When a photo in such a folder is selected for deletion, it should automatically be moved to the Mac OS trash.