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One of the main reasons why I recommend the use of an album over a Smart Album is that it becomes a lot easier to organize your images. So if you've tapped into Photostream or a Smart Album to collect your pictures, go ahead and still put those into a normal album so you can start to organize. If you don't use an album the act of creating a book can be a bit messy. For example, I could select an event and create a new book and what you'll notice is that when I create the book, the photos are going to be extremely random.
Notice that pictures that I would likely want to keep together or images that I'd like to be sequential can somehow end up out of order. iPhoto is a little bit random when it does this. It just simply goes in the order that the pictures were shot if you build it on an event, and the order that things are shot are rarely the order that you want to present them in. On the other hand, if you take the time to actually create an album and I'll choose all the pictures in that album and when I create the book, you'll notice that it does a much better job of using those images and laying out the book.
The order that I set them in that album is the order that things get presented in. This makes it a lot easier to create a professional looking layout that I'm truly happy with. So use your album to get the images in the basic order that you'd like in the book. Everything can be completely rearranged and we're going to explore the whole process next.
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