iPhoto '11: If you see a message about rebuilding your thumbnail cache
Over time, iPhoto can become less efficient at accessing the photos in your library. Rebuilding the cache can help iPhoto display your photos faster, and can also resolve issues such as thumbnails that appear to be dimmed or missing.
After upgrading iPhoto, you might see a message asking if you want to rebuild your thumbnail cache. You can choose whether to do it then or come back to it later.
To rebuild your thumbnail cache:
If iPhoto is open, quit it.
Hold down the Option and Command keys while you open iPhoto (click the iPhoto icon in the Dock).
The Photo Library First Aid window opens.
Click Rebuild Thumbnails to rebuild the thumbnail images in your photo library.
For information about the remaining checkboxes, visit the iPhoto Support website and search for “rebuilding the iPhoto library.”
Rebuilding the thumbnail cache may take several minutes.