I found a fix courtesy of a number of searches on Google...
Open applications and select iPhoto, view the package contents and find the info.plist file, make a backup of this file on the desktop. You'll find an entry within this file as follows:
Delete this entry within the iPhoto package and save the file. Then go back to the applications folder and duplicate the iPhoto application. Call the duplicate 'iPhoto Rosetta' or something similar. Now if you 'get info' the 'iPhoto Rosetta' application and you should see the option to 'Open using Rosetta' check this and close the info box. Now open the original iPhoto application contents and copy the original info.plist file back into iPhoto.
You should now have two versions of iPhoto - one that runs in PowerPC mode and another running in native mode!