Because books offer the most flexibility, they require the most effort to create. But fear not; iPhoto still makes the process far more simple than laying it out by hand would be. Here's my recommended process:
To create a book:
Make a normal album with the photos you want in your book (see "Creating Albums" and "Adding Photos to Sources" in Chapter 3, "Organizing Photos").
Arrange the photos in the album in the rough order you want them to appear in the book (see "Sorting Photos" in Chapter 3, "Organizing Photos"). Make sure no photos are selected when you're done.
Click the Book button under the display pane (Figure 7.13).
Figure 7.13. To make a book from an album, select it and click the Book button.
In the book design dialog, choose a book size from the Book Type pop-up menu and select a theme from the list of themes. The dialog shows a preview of each book size and theme (Figure 7.14).
Figure 7.14. Next, choose your desired book type from the Book Type pop-up menu and pick a theme from the scrolling list of themes.
After informing you of how to add photos to the book, iPhoto creates your book.
For each book page, set the number of photos and the design using the Page Type and Page Design pop-up menus, and add text as desired. You can drag photos from slot to slot to move them around or off the page entirely to put them back in the unplaced photo list.
When you're done, click the Buy Book button, and run through the process of ordering your book.
Should you let iPhoto lay out your book automatically via the Autoflow button later on? Only if you're particularly short on time and want a quick result. It's much harder to re-arrange photos on pre-built pages (so use automatic layout only if your photos are already in the correct order). Also, iPhoto can't guess how many related photos you've given it or which photos are likely to look good together in a two-page spread, so expect to spend time fixing every page.
There's no harm in trying an automatic layout, but if you don't like it, delete the book and start over, rather than trying to fix each page. I never use the Autoflow button.