Where are Photo Booth image files stored in Lion?
They're stored in ~/Pictures/Photo Booth Library on Lion. This is a package though and you can't just double-click in to the package to see the sub-folders. Double clicking on it will, instead, open Photo Booth.

If you just want to get at the pictures, right-click (or control-click) on the Photo Booth Library package under ~/Pictures and select Show Package Contents from the menu.

Under the package directory you'll see a sub-directory called Pictures -- that's where Photo Booth is keeping your snaps. Change in to there to access the images directly.  Movies are also stored in there (regardless of whether they had any effects applied) as *.mov files.

From within Photo Booth you can also right-click (or control-click) on any image in the bottom bar and select 'Export...' or 'Reveal in Finder' from the pop-up menu to access the image. The former gives you a Save dialog that lets you place the image file in some easily accessible location. The latter opens up that Pictures directory in the package I mentioned above directly in a Finder window.