Yes, it does. Upon exiting edit mode. Instead of using metadata or setting the EXIF tag. This is so unbelievably asinine that I’m considering ignoring iLife ‘08 altogether and spending a small fortune (US$299) on Lightroom.
iPhoto '08 - image rotation creates a new copy
Created on Aug 12, 2007, 16:37 by Rui Carmo, not updated since.disk, exif, iphoto, management, photography, space, stupidity