I wrote this out for a friend of mine and thought I should post it here as well. Back in 2010 we wrote a post on Photography and Colour Management, and this is complementary to that post.
When it comes to colour digital photography, many photographers are aware of white balance. If you’re not, this Wikipedia article on Colour Balance explains it well. The essential element is that the human eye sees subjectively (our eyes receive energy as light and our brains interpret what that energy means) whereas digital cameras see objectively. The human perspective is highly adaptable, so no matter where or when we find ourselves, if we see something white, we recognize it as white, no matter what colour it actually is. Cameras can’t do that. If you’re shooting .jpg images you select a white balance setting on the camera – daylight or incandescent or even auto – and the camera’s software shifts the information captured so that white looks, well, white. If you’re shooting RAW, the images captured have no integral white balance and one must be assigned during raw conversion.