How can an iPhoto Library be shared between users in a way that facilitates backing up to Time Machine? I'm aware that there has been a similar question that points towards Apple's own guidance on sharing iPhoto Libraries.

Apple's solutions aren't compatible with Time Machine - it can't be used to back up an external drive and a disk image appears as a single file, meaning the whole image would have to be backed up every time it changes, rather than just the changes.

I currently have my iPhoto library in the /Users/Shared and it sort of works, except for regular permissions issues. I can cope with these OK, but my wife finds them confusing and frustrating.

As a general rule, photos are imported in my account and I manage Events, Faces, Places and PhotoStreams. My wife generally just wants access to the photos to share them and occasionally to create albums.

Is there a better solution, possibly one involving Hazel, Automator and/or AppleScript?

Currently running OS X 10.8.2 and iPhoto '11 (9.4.2).
You don't have to put the Library on a Disk Image. You can put it on any drive formatted Mac OS Extended (Journaled) - a USB/FireWire/Thunderbolt drive. Time Machine can back up externals too. 
From your description - all your wife wants is access and to make occasional albums, then iPhoto Sharing is more simple than trying to share the whole Library.


If you want the other user to be able to see the pics, but not add to, change or alter your library, then enable Sharing in your iPhoto (Preferences -> Sharing), leave iPhoto running and use Fast User Switching to open the other account. In that account, enable 'Look For Shared Libraries'. Your Library will appear in the other source pane.

Any user can drag a pic from the Shared Library to their own in the iPhoto Window.

Remember iPhoto must be running in both accounts for this to work.