1. Go search for a pref file on your computer called: com.apple.iPhoto.plist.
2. Look for several settings.
i) BookTargetImageDPI
ii) BookTargetMediumImageDPI
iii) BookTargetSmallImageDPI
3. Change their values from the default (forgot what it was) to 300. Like I said, you can change it to a DPI higher than 300 if you want, but the quality will end up almost the same, since quality also depends on the printer being used to make the book.
And instead of iPhoto sending Apple a 15-20 MB file, it's going to send them a 50-80 MB file, depending on the number of pages and photos in your book. Just warning you now.
4. Since iPhoto warns you if you're using a poor quality, low DPI image, you can change the settings so that you get a warning at a DPI that's different from the default (say you want 200 DPI to be the bare minimum). To do so, change the "BookWarningImageDPI" setting to whatever DPI you want. I think I changed mine from 150 to 180, but that was a bit pointless, wasn't it.
5. Get your hot sister to join MacRumors and PM me.
6. Go away and leave us alone.