In the file system on the iPhone, Photos are located under /User/Media/DCIM/*
But where should I found Images of "Photo Library" ?
Control+ Click on iPhoto Library to expose the dialog box that includes Show Package Contents
That's where the images are
BEWARE.. don't manually move or delete these files. They are part of an XML database structure which you will screw up if you fiddle with individual files. This is the reason Apple keeps them 'hidden'
In case you are still wondering where it is located inside your iPhone, as I just answered elsewhere, this is the place:
photos are usually stored in 2 folders in iPhone 4 Photos Albums: (1) Camerca Roll (2) Photo Library
I use "iPhone Explorer" application (on my Mac, not sure if there's a version for Windows), and get to my "Photo Library" photos by going into:
In above directory, each picture is stored in a separate folder (at least this is so on my iPhone 4).