This paper illustrates the power of the dominant image. One of the things that makes tabs stand out over broadsheet publications is that you usually have to go with just one image while broadsheet offers more of a chance to play up photos.
But the hard thing to do with dominant images is to get out of the way and allow the photo to speak for itself. Overall, there is nothing seriously wrong with this page. Your attention is zeroed in on the photo, which allows your eye to fall naturally to the subhead below. The other elements on the page are coordinated to go with the dominant art and there's plenty of white space, leading to a very clean look.
The big issue here lies in the headline stripped across the top of the photo. It gets in the way of the celebration going on by cutting into the "M" girl's cheer and obscuring the hand of the "R" girl. This is a case where you have to decide - do you really need a headline there? Is the overall impact of the photo reduced because of the headline? Is there another place where you could put the headline? Perhaps reducing the size of the bottom teasers to allow the photo to come down some would allow this to happen.
Using text on a staff photographer's image is something that should always involve dialogue between either the designer and the photographer, or the designer and the photo director. Essentially you, the designer, are altering the photographer's work as much as if you go in and slash the ending of a reporter's story without notifying an editor first. Some photographers will be okay with it. Others might get hurt feelings because of it, leading to tension that can easily be avoided.
One of the best relationships a designer can make is with staff photographers. If you're handed a story with a series of photos, the photographers will be able to tell you which is the strongest to use. In a case like this one, they can advise you on the effect of type over the photo. If you don't feel there's any other alternative other than text over the photo, study where it should go. There's a lot of dead space on the bottom left part of the photo. See how a slightly larger and bolder "House Party" would go there.
If you're intrested in putting type over photos, study magazines and other newspapers, such as The Virginian-Pilot, that do it well. Note how they use the type, yet retain the power of the image.
In the end, the decision lies with you as the designer. You know what your paper's stylebook is like and what limits you have with your pages. When in doubt, open a dialogue with the subject involved - be it the reporter or photographer. Whatever you do, when you advocate doing something that goes against the grain, make sure there is a concrete reason why you want to do it, not just because it's there.
