Derrick, I was a bit disappointed in this article, and I'm a big fan of yours. You did tell us that iPhoto bogs down on all but high end machines with 1GB libraries, but you didn't explain why.
1GB isn't all that big. Heck, it's only 500 or so images!! My original Mac SE/30 handled a FileMaker database with several thousand records with aplomb. True, the records did not contain images, but that's what the file system is for, the records only contain pointers to files. Surely HFS+ can manage 500 files! (I'm joking of course, you know it can handle tens of thousands of files.)
So the really interesting question hasn't been touched. Why won't iPhoto scale to an even trivial number of images?
PS. I do 1000 images in 6 months. No sweat.