How can I change the shape of a photo in iPhoto?

No. You'd need an external editor for that kind of stuff:

In order of price here are some suggestions:

Seashore (free)

The Gimp (free)

Graphic Coverter ($45 approx)

Acorn ($50 approx)

Pixelmator ($50 approx)

Photoshop Elements ($75 approx)

There are many, many other options. Search on MacUpdate or the App Store.

You can set Photoshop (or any image editor) as an external editor in iPhoto. (Preferences -> General -> Edit Photo: Choose from the Drop Down Menu.) This way, when you double click a pic to edit in iPhoto it will open automatically in Photoshop or your Image Editor, and when you save it it's sent back to iPhoto automatically. This is the only way that edits made in another application will be displayed in iPhoto.

Of course, you may not want to change the shape of a photo which would distort it. You may want to print it in an oval shape but undistorted. I'd use a page layout app like Pages for that,

shape?

you can crop to a different rectangular shape - for a non rectangular shape you need another photo editor

LN

Derp.

IF the oval does not need a transparent background, apply a vignette from the adjustments in Edit mode. You may need to use the Add button to see the vignette adjustment.