I'm not sure how it would work with the photos on an external hdd (all of ours are actually on the macbook), but there is a "shared" folder. Open up a Finder window and click on the Macbook HDD (Should be the 2nd item in the list on the left). Either in there or under users there should be a "Shared" folder. I don't have my mac in front of me and I can't remember for sure. You have to move the iPhoto library to the Shared folder and then give all the other users full permissions (right-click -> "Get Info". Permission settings are at the bottom of the list that comes up). The final key is to point iPhoto to the shared library. You have to hold down the Option key while you click the iPhoto icon. Instead of opening up, it will ask you for the iPhoto library location. Point it to the shared library and iPhoto should open up as usual from there on out. You'll have to repeat the opening process with the other users in order to point iPhoto to the shared library for them.
The iPhoto library is a little different. It appears in finder as just "iPhoto Library" and should be under the user you imported the photos with. iPhoto keeps everything organized in this file for you. To see the contents you have to open iPhoto and then select a photo and then go to File -> Reveal in Finder -> Original File. This will pull up a Finder window with the contents of the iPhoto library opened.
One word of caution, when I upgraded to iPhoto '11, I started having problems where photos that my wife and I imported from our camera would show up only until we closed iPhoto. When we opened it back up, they were no where to be found. Using the "show original file" option in the menus though, I was able to find out that the pictures were still on the computer, just not showing up in iPhoto. After messing around with this for what seemed like forever, I stumbled across a work around. It seems that if any other users are logged in to the mac when you import photos from somewhere, iPhoto does something funky with the library and the imported pics won't show up the next time you open iPhoto. For things to work properly, you have to have all the other users logged out before you import. This kind of stinks as the fast user switching on the mac is incredible and one of the features that my wife and I use the most.