Backing up images that are in iPhoto Library In my backup software, iPhotoLibrary is greyed out, so I can't select it to back it up.

How do I select the iPhotoLibrary to back it up?

(My back up program is Workspace Desktop (a Godaddy program).
You can do so even without your back-up program.
Inside the Pictures folder you'll see a file called iPhoto Library. Copy this file to a location you find suitable for your backup and vwoila, there is your back-up!

And just for the record, why don't you use TimeMachine?