It won’t slow it down, but it is a headache. You’ll need to clone or back up the drive to another drive. Then boot to the recovery partition. Then you’ll need to open Disk Utility, partition the drive. etc etc. You’d be better off just popping over to Dabs.com or your local PC store and buying a 1TB portable HDD. Buy a second one at the same time and you can then make sure you have an off-site back up too.
An easier thing to consider is: login as the administrator (neither of your user accounts should have admin rights, but I figure you know that*) and create a separate folder on your current drive to which both users have read/write access. Move the iPhoto library there. Then point to that library when you open up iPhoto next time round.
As long as users close iPhoto before logging out of their sessions your iPhoto library might stay OK. Good luck.
*Mac hardening Apple NSA Sans
[edit] would you post a link to the Apple support document you cited about partitioning the drive? I’m intrigued by that. Does it pre-date the most recent version of iPhoto?