Sierra - yes, iPhoto Buddy will let you keep your elements and photos separate. It's a free download (actually, donation-ware), so it's definitely cheaper than iView MP - lol! You can play with it and see if it meets your needs. I don't know why Apple doesn't just incorporate that feature into iPhoto.

Michelle - I've never had that issue with iPhoto and PSE. As a matter of fact, I've never had PSE "see" anything from iPhoto? Usually, I use iPhoto to open a file up in PSE, not the other way around, ykwim? How are you doing that? I'd like to know that trick.