iPhoto is designed to manage thousands of photos without bogging down. And its photo-management features are aimed at helping you find that photo of a needle in your photo of a haystack.
I mention this as a way of saying that you may be completely happy having just one master iPhoto library, even if it becomes huge. Just remember to back it up often (see the opposite page).
Still, a lot of people like to keep multiple libraries and switch among them. Some people do it for backup convenience: it’s easier to sling a smaller library over to a DVD-R or an external hard drive.
For some people, multiple libraries are a way of further categorizing photos. Vintage scanned photos in one library, newer digital shots ...