What steps to do I take to restore one photo only for my iPhoto library from a Time Machine?
It might not be the most user-friendly way, but one possibility would be to locate the backup file in finder (very probably in Backups.backupdb/latest on your TimeMachine drive), navigate to Macintosh HD/Users/[user]/Pictures. Right-click the iPhoto-library, and choose 'show package contents'. Then open the Masters folder, and navigate to the date (year-folder / month-folder / day-folder). There will be a few folders in there with seemingly random names (on closer inspection you'll see this are the dates and times when they were added if i'm not mistaken), each of them will contain the pictures made on that date. In this way you'll be able to copy the picture you need.
Just be sure to COPY the picture in stead of moving the picture from there, otherwise you'll mess up the library.