iPhoto 11 tells me Nikon Coolpix 5700 RAW files are "unreadable".

You can't without converting them to a format that iPhoto will understand.

The Raw from every model of camera is different. Note: that's every model not every brand. So, the NEF produced by a Nikon D40 is not the same as the NEF produced by a D60, the CR2 produced by a Canon 350 is not the same as the CR2 produced by a Canon 400.

Therefore the Raw for every camera model needs to be added individually. If yours is not supported then let them know you want it:

iPhoto menu -> Provide iPhoto Feedback

Here is a list of the supported cameras (iPhoto supports the same ones.) Yours is not on it. You may want to provide feedback to Apple to request that your camera be supported. You may be able to use Nikon's software or Adobe DNG converter to get your images into iPhoto:

http://www.apple.com/aperture/specs/raw.html

Did you have the "convert to linear" option turned off?

https://discussions.apple.com/thread/3361143?answerId=16287825022#16287825022

Can preview read them?

Raw support is system wide. Preview, iPhoto and Aperture should be able to read supported RAW files. If the Preview application cannot open the file there is a problem with basic System level RAW support.

I am sure that Nikon's converter will work.