Your photos are stored in your home folder, under Pictures, then iPhoto library. This contains all the photos that iPhoto will use. If you are going to use iPhoto, do NOT do anything to/with your photos in the library in finder (don't rename, move, edit, rotate or anything else -- corruption and lost photos will ensue). Forget that this folder exists!
Open iPhoto, use the import function to import your photos folder by folder (or else you will lose your organization). Name your photos whatever you want (if they are not already named) using the info pane on the lower left. You can batch change them if desired by selecting the photos you want to change, then clicking "Photos" on the menubar, the "Batch Change" and entering the changes you want. Then, within iPhoto, you can create folders (for example "Vacations" and within that, create albums (for example, "Summer 2007", "Winter 2005"). Use keywords for even more organization and you will be able to find anything quickly.
If you want to upload photos to MySpace or anywhere else, drag the photo to the desktop, or again, use the export function (that will give you options as to size) to put your photo on the desktop, and then upload from there.
There is NEVER a need to go into the library in finder. iPhoto is a good and strong organizational tool that will take an enormous amount of work off your shoulders. The editing functions are fine for regular photos, but if you need more, there are several additional programs (Photoshop, Photoshop Elements, etc.) that can help. You can set these to be your external editor from within the iPhoto preferences, and then when you click to edit, the external probram will open, you can edit, and then it will save the photo back to where it came from. Simple!
And, yes, if you create folders on your hard drive with your photos, and then import them into iPhoto, you will take up twice the space. They only need to be in iPhoto. iPhoto will always keep the original of you photo in case you ever want to revert back (after editing) to the original. So you will have a folder with originals and a folder with "modified" photos, but that is the only duplication.
Good luck, enjoy iPhoto and its strong capabilities! Come over to the easy mac way!