Places is a useful feature, but it does rely on geocoding to work its magic. This isn't a problem with some of the new digital cameras that come with GPS capabilities or a GPS-enabled smart phone like the iPhone 3G. Older cameras and existing photos aren't likely to include this data, however, and even modern devices may not be accurate if they can't properly acquire a GPS signal, which can often happen indoors. IPhoto will allow you to manually add location data to any photo by mousing over the photo and clicking the small "i" icon that appears in the lower right corner, and you can do this in batches by selecting multiple photos. If you have a large iPhoto library, however, assigning all this information is going to take some time.
One feature that could be a little easier to use is the interface for managing your custom list of Places. The option is located in the Window menu in the menu bar and is easy enough to use. However, it can't be accessed while manually assigning locations to photos, which is probably when it would be easiest to use. As a result, you end up having to switch between creating locations and assigning them, which makes for a disjointed workflow.
Beyond Faces and Places, iPhoto '09 offers integration with Facebook and Flickr for sharing photos. While direct access to these sites was possible through third-party extensions in past releases, it's now built into iPhoto directly. Each upload will create a new album in Facebook or Flickr based on the upload itself, not on the events or albums in iPhoto, which could be a little confusing. Uploading all photos you want to share from a given event or album at one time avoids this issue.
When uploading to Facebook, individuals identified via Faces will be tagged as people in the photo automatically. If a user untags himself in a photo using Facebook, iPhoto will remember that instance and not attempt to tag them again if the photo/or album is updated. The one challenge here is that for Facebook tagging to be truly effective, you must be sure the names you are using in Faces match people's names in Facebook. Places geocoding data is included with photos uploaded to Flickr.
IPhoto also boasts enhancements to its photo editing capabilities, most notably the ability to automatically avoid adjusting skin tones when changing color saturation. Others include smart retouching to avoid blurring object edges, the ability to adjust the definition of an image, and smart adjustment of highlights and shadows. Also included are additional photo book templates, and slideshow themes. The themes include a variety of professional designs and transitions as well as integration with Faces to keep photos centered on people.
Without a doubt, iPhoto '09 packs a lot of punch and is pretty much worth the upgrade price in itself. Faces is definitely the standout feature, with Places a close second. That said, if you have a large existing iPhoto library -- or an extensive collection of photos to import into iPhoto -- be prepared to spend some serious time identifying people and locations to get the most value from iPhoto '09.