how do I view photos in iPhoto backup?

What kind of backup do you have?

If you are using Time Machine to backup your library, you have to restore the library from the backup to view the photos. See this help text.

iPhoto '11: Restoring from Time Machine with iPhoto '11 (9.2 or later) and OS X Lion 10.7.2 (or later)

If your backup is a copy of the iPhoto Library, just double click this copy to open it in iPhoto. Browse it, then double click your main iPhoto Library to switch back to your main library.

This 2006 backup is on CD, before I had Time Machine. Since posting I've found I can dig down into folders to see and SAVE AS individual photos. It's not convenient, but it works.

If it is a CD, it is the only way. iPhoto '11 cannot open iPhoto Libraries on CDs, because iPhoto '11 needs to write to an iPhoto Library, even if it is only browsing the library. Otherwise you would have to copy the iPhoto Library to a disk, where you can open it in iPhoto.

have you tried simply drag-dropping the photo(s) from the CD ( or DVD) onto the iPhoto app ?

If the CD was created by an earlier version of iPhoto here's how you can convert that to a library that you can open with iPhoto:

1 - copy the library folder from the CD to the Desktop.

2 - download, install, run and apply the iPhoto Library Upgrader 1.1 on the library folder on the Desktop. The upgrader will be found in the Applications/Utilities folder. That will covert it to a format that iPhoto can open as a regular library.

3 - if you want to merge any photos from that library into your existing working library you can do that with the paid version of iPhoto Library Manager.