Note: To work with Keywords in iPhoto '08, click here.
First, you need to be able to see the Keywords you assign. Go to the View menu and make sure there is a check next to "Keywords." If not, choose Keywords from the menu and it will become checked.
Next, make sure that you can see your Keywords in the bottom left pane. You may need to click on the key icon to show the Keywords. You can also resize the pane if you can't see all of your Keywords.
To assign keywords to a photo, drag the photo over the Keyword you want to assign. You can select multiple photos and drag them as a group to a keyword.