How far does iPhoto take you?

Hello,
As I get deeper into digital photography, I am wondering how far serious amateurs go with iPhoto. Is there some point where you find that you wish the software could do more than what iPhoto does and then, do you move on? iPhoto is outstanding, and Photoshop is very expensive. And yet, I begin to think that blowing $400 on another lens might be spent better on software.
So how does it work for you?

Ratty:
PSE has about 80% of Photoshops editing capability at
about 25% of the price. It is far more versitile to
iPhoto in editing power, allowing the user to create
layers, etc.. It does have a much stepper learning
curve however, but you can do so much more with it,
for example. You can add text to
images as well. There is one caveat to using PSE
thru iPhoto and that is if you create an edit that
requires a layered file and, thus, a change of
extension, you must save it to the desktop and then
import as a new file. Future edits on that file can
proceed as usual.
The Effects pallet in iPhoto does make it easy to
make those types of changes and the Effects pallet is
much more extensive than before. I think there's a
demo of PSE available that you can try and and use to
compare edits with those in iPhoto.
Toad,
At first, I thought the sample photos you linked to were different photos. I thought, whats the point of using two different photos to show off the software. Only looking more carefully did I realize that each one was the same photo twice! Very good example of Photoshop Elements! Thanks very much. Seems like a good buy at the price.

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