I don't know if the is common knowledge for others, but it's news to me!
[robg adds: Amazing! I've wanted this in iPhoto since the first time I used it -- I seldom want a full-screen slideshow (that's what the screensaver and/or desktop imagery are for). In playing around with this feature, I found that the window that opens is resizable -- just grab the corner and pull (or push -- you can make postage-stamp size slideshows with nicely scaled images!). The resize feature is a bit buggy; after resizing, close and re-open the slideshow window, and all the images will be properly sized. I wish I could re-map the button to always send a control-click!]

