First and foremost, stay out of the finder! iPhoto organizes things in there in its own way so that it will function. If you move or change anything there, iPhoto will not be able to find the photos. Forget about the library in finder!
If you use the burn function in iPhoto, the resulting file will only be able to be read by another machine with iPhoto. If you want to do elsewise, you do not want to use that function.
Now, for your real question. Have you tried using iDVD to create a slideshow viewable in any standard DVD player? It is a great way to share photos with others. You will also have the option to include the photos themselves on the disk that you will burn, so the recipients will have access to the actual files. I believe that burns in the order of the slideshow/DVD. Simply choose your photos in iPhoto, choose Share in the menubar, and export to iDVD. Then you can choose a theme, music, etc. Can't remember exactly where the option is to put the photos on the disk as well, but look for it and you will find it. Be sure to check that off when you first start your project.
Good luck!