Oddly, the disk also has to be read-only for iPhoto to recognize it.
I burned an iPhoto CD just for test purposes and tried it in another Mac. Worked fine. Then I made a writeable disk image from it and mounted that image. I figured I'd see if I could add comments and so forth. and maybe figure out how to build the CDs manually. iPhoto wouldn't recognize it as an iPhoto CD.
I converted that writeable disk image to a read-only image, mounted it, and it popped right up in iPhoto.
So, in addition to whatever Magic Files are involved, the disk has also to be read-only.