On the Mac, on iPhoto, you've got albums (which contain specific photos), smart albums (which contain dynamic photos), events (which are effectively albums organised by import), faces (which contains photos organised by who's in them), and places (which contains photos organised by GPS location). Okay.
There's also the Address Book application, which can associate a photo with a person. When you go to add one, you get two choices: take a new photo, or choose an image from the filesystem. The obvious choice - to select a photo from within iPhoto - isn't even offered, let alone the choice of selecting a photo from the Faces section within iPhoto. This is even more dumb, given that the Faces section of iPhoto will notice that you've entered a name that matches a name in Address Book, and will suck the corresponding email from that contact entry into iPhoto.
(I've previously ranted that, by definition, Address Book contains addresses, which, y'know, specify locations, but the Mac's iCal application's "Location" field doesn't have any facility for pulling the Location field from the Address Book. Unsurprisingly, therefore, there also isn't one for pulling a corresponding picture from the Places section of iPhoto.)
On the iPhone, it's even worse.
First, in the Photos application, there are categories, again: Albums, Events, Faces, Places. Jolly good. But the Albums section lists them in an apparently random order , with neither ordering nor searching capability.
Then, in the Contact application, you can again edit a contact record to add a photo to it. This time, the choices are to take a new photo (again), or - hooray! - select one from Photos. But the way it does this is terrible: you get a huge list of all the albums (in that random order again), then all the events, then all the faces (which are at least in alphabetical order). As I've complained in the past, Apple still haven't figured out a method of scrolling a large list, so you've forced to scroll past what may be thousands of list entries before getting to the faces section. Again, no search or ordering facility. Argh.