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When choosing software tools for designing your photo book, there are several choices available. Programs like iPhoto and Photoshop Elements have integrated photo book features. If you're already using one of these programs, it's easy to integrate making a photo book into your existing work flow. For the serious amateur and professional photographer, Adobe Lightroom and its Apple competitor, Aperture, also now include bookmaking tools. These make it easy to take a subset of your existing photo catalog and craft it into a book with seamless uploading of the result to photo book services like blurb.
My personal preference is to combine Lightroom, which I use for cataloging and developing my images, with InDesign where I arrange the images on the page. Once the prepped images have been exported from Lightroom, I use Bridge to view them and if necessary change their order. While I find Lightroom sufficient for prepping most images, there are always those that require additional processing. Perhaps the removal of distracting elements, fixing perspective distortion, or masking to make selective adjustments.
For such images I use Photoshop. In making your photo book there is no definitive right or wrong way. The best tool to use is the one you are most comfortable with.
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