Several people have reported problems with iPhoto 5 making unwanted changes to pictures. Some have observed that there is some kind of Colorsync profile issue involved with encoding in pictures. Following that lead, I tried something. I'm somewhat color blind and most normal screens look bluish to me -- so I've taken to making my screens customized balanced to my eyes which others report as somewhat reddened.
I have had a strong form of the iPhoto 5 problem. So I tried resetting the color balance in the Display preferences back to defaults, and suddenly iPhoto 5 doesn't severely alter the color balance (or nearly as much). It still alters the picture when clicking Done, but the effect is far reduced and perhaps even good sometimes. However, if you change sharpness on a picture, that change is still lost.
Many of the general issues have been covered on a MacFixit thread, but I've seen no one offer any workaround. I agree it is a bug that Apple needs to fix, but this has left me in a workable, if not what I'm used to, using iPhoto to edit pictures.
[robg adds: I hadn't heard of this problem before, so I followed a test suggestion in the above-linked thread, with a slight change. I duplicated an image, then did four "Retouch" operations on the duplicate, saving after each retouch. I only clicked on one pixel with the Retouch brush (i.e. no dragging), so this should have only affected four pixels in my modified image (at least, that's how I understand Retouch from the help page). As you can see below, the modified image on the left has been dramatically lightened:

Mac OS X Hints
http://hints.macworld.com/article.php?story=20050601191113703