If you set date and time on your digital camera, then date and time are recorded automatically when you take a photos. When you import photos to iPhoto, it groups the photos taken on same date as one event. If you import photos of several days, then an event is created for each day. iPhoto allows you to change the date and time for any photo, merge events, split events and much more. An event grouping is useful within iPhoto, and for searching photos by event in iMovie.
An event is a collection of photos from single time and date. An album is a collection of photos from any time or date. In many cases an album is a collection of photos from a single event like a wedding album. In this case the album may be a selection of pictures from all the pictures that make up the event. Albums are better for the iPhone, because there is no Events menu choice yet in the current iOS version or "Photos" app.
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