in the flow i have adopted i first process ALL my images in lightroom and then fine tune any images for my blog, site, prints for the client, etc... in photoshop.
now, i am trying to figure out when & where to photoshop the images i am using for my albums. at wppi i peaked in at kevin kubota's booth and thought i noticed an interesting feature... the ability to incorporate an image into an album design, and then edit that ONE image by itself in photoshop, after it had already been incorporated into the design [the edited photo would then be 'slipped' back into the design in the appropriate place... and i think this has something to do with smart objects].
for me this would be the ideal:
1. process all images in lightroom
2. select images to be used in the album
3. create the album design
4. fine-tune each image in the album independantly in photoshop
5. submit to the client for review
and, as a side note, has anybody here used kevin kubota's 'auto-album'? any comments?

