iPhoto 11 added an awful new built-in email service that replaces the previous functionality: when sending an email, it used to open Mail and attach the photos to a new email. Now, it uses a poorly designed, built-in email functionality that ruins everything.
To send photos again using Mail, run the following command in Terminal:
defaults write com.apple.iPhoto EmailApp Mail
To return this functionality to iPhoto, run the following command in Terminal:
defaults write com.apple.iPhoto EmailApp iPhoto
(Originally found
here.)