This Macintouch discussion has a superb thread on Color Profiles. Alas, iPhoto does not hold up well.
Chris Murphy, co-author of "Real World Color Management, 2nd Edition"Yech!! I've used sRGB in my workflow, it worked well with iPhoto 4. I wonder if I should switch to AdobeRGB for a while?
The iPhoto 5.0-5.02 color problem, previously reported, is caused when iPhoto converts images from the embedded source profile to the display profile, then incorrectly embedding the Generic RGB profile. iPhoto 5.03 resolves the bogus tagging that was the main problem, but concerns remain. Here are the three behaviors to expect from iPhoto 5.03:
1. Untagged images. iPhoto assumes the currently set display profile for images that do not contain an embedded ICC profile (including images containing only EXIF data indicating the image color space is RGB). It then converts from that space to Generic RGB and saves the edited image with that profile embedded.
2. Images tagged with "table-based" profiles. iPhoto uses the embedded profile as source, converts the image into some as yet undetermined intermediate space for performing the requested edits (red eye, crop, enhance) and then converts again to the original source space. The closest thing to this intermediate space I've found is sRGB. Thus the image data is altered, but the original profile remains embedded. Color appearance of the original is preserved only insofar as colors exist in this "sRGB" like intermediate space, and if they don't color appearance is not fully preserved. Subsequent edits result in additional conversions.
Needless to say neither of these are high quality options. In the first case, anyone working with untagged images isn't particularly quality conscious in the first place, so they're unlikely to be hurt by the first behavior. The second behavior, on the other hand, will occur when any kind of table based ICC profile is embedded in the image, including matrix based profiles using table-based tone reproduction curves. Examples include some display profiles, and essentially all digital camera, scanner and printer profiles. Apple should perform conversions through a wider gamut color space than they are currently using, and it should be a one time "normalizing" event to avoid additional and unnecessary conversions.
3. Images tagged with simple matrix and gamma based profiles are not converted. Thus, iPhoto is now a good citizen when it comes to normalized workflows. Examples of such RGB spaces are Adobe RGB (1998), ECI RGB, and ProPhoto RGB. I don't include sRGB in this list because there is a simplified sRGB which causes behavior 3, and the more common, correct, and accurate one with flare which uses a table based tone response tag which causes behavior 2.
In most cases, the conversions aren't a problem, but if you're working with color-critical images either ensure they are tagged with one of the aforementioned profiles or avoid editing images in iPhoto 5.0-5.0.3. The clincher for quality conscious users is that iPhoto 5 doesn't do normalizing, so the conversion into one of these well behaved editing spaces, e.g. ProPhoto RGB, must be done in another application anyway.
The plus for professionals who already use Adobe RGB (1998), ECI RGB, or ProPhoto RGB will not need to be concerned about iPhoto 5 doing something senseless like performing ill advised color conversions on such images when doing something as simple as cropping.