Problem with the tip is flickr favoriting doesn't work so well for letting a group pick a good subset of a large batch of photos. Favorites are more for letting your friends know great individual photos you've discovered as you wander flickr.

More apropos to what you're doing is ourdoings.com's option (on by default) to let anybody move a photo between the "featured" and "more photos" sections for a given entry. Make an unlisted site just for your friends, tell them to click on the "Edit" tab and volunteer. Once you approve them, everybody can upload, etc., so it's a nice group site.

It's integrated with Clickpass (a YC startup), so registration is trivial. You can edit photos after uploading thanks to integration with Snipshot (another YC startup). If $25 is a lot of money, maybe you should make your site public rather than unlisted. That way you could collect tips with tipjoy (another YC startup). Public sites are also the only ones that can use Disqus integration, until such time as Disqus supports private comments. OurDoings is the only photo-sharing site with Disqus comments.