I wasn't happy with the red eye editing in iPhoto, so I bought Photoshop Elements 6, which gives much better results. One thing I discovered is that with iPhoto open, I can drag a photo onto Elements in the dock, do the red eye adjustment, save it, and the newly-adjusted photo appears directly where it was in iPhoto. The original can still be reverted, too.
[robg adds: iPhoto offers, of course, the Edit Photo pop-up in the General section of its preferences, where you can specify any image editing program to use when editing a photo. I wasn't aware, however, that you could (successfully) drag-and-drop an image from iPhoto to a program in the dock.]
Mac OS X Hints
http://hints.macworld.com/article.php?story=20081112082625590