When iPhoto '11 was released, how you shared your photos changed. Instead of sending photos as simple attachments, they were now imbedded within the message using iPhoto as your Email client. To share photos as simple attachments meant exporting your photos by selecting, File - Export, and saving them for later use in an Email. For most users, this was not an acceptable.
The iPhoto 9.1.1 update fixes this issue but you must navigate to iPhotos preferences after updating to do so. in iPhoto '11, go to iPhoto's Preferences and select General » Email photos using: and choose Mail or whichever other email client you use. Now when you select Share in iPhoto, you can select the file size you wish to send and compose your message in you favorite email client.
[crarko adds: I tested this, and it works as described.]
Mac OS X Hints
http://hints.macworld.com/article.php?story=20101229112949147