This post at the Apple Discussion forums explains how to restore your iPhoto photos. Thanks laverne’s mom.
Your question had me wondering too and so I checked my Time Machine and couldn’t see where any photos were. I then pulled out a book I got when I first got my mac ( Its called The Missing Manual. I got it used from Amazon) anyway, if you open iPhoto, go to File then Browse Backups. It will show you the photos that have been backed up and are available for recovery. I hadn’t paid much attention to that before and am glad I discovered it now, rather than when I am in a panic over a lost or misplaced photo. Hope this helps you find what you are looking for.