Hi Andrew
I'm sure Ian Wilson and others more expert in DPP and who are using similar high end lenses can comment. My understanding is that DLO doesn't just correct for lens deficiencies but also the effect of softness introduced in camera, particularly by the anti-aliasing filter over the sensor (that the 5DIII and most cameras have). Have a look at the post below as it gives a bit more info and implies the iBook you have isn't quite on the mark. I'm assuming the quotes from Canon below are accurate but haven't checked. Also, I'm guessing here, but suspect that even on the very best lenses, chromatic abberation will be hard to eliminate completely. For those situations where it does arise, I'd expect DLO to be the best possible way to fix it. That's certainly what I've seen with my lesser lenses.
http://www.dpreview.com/forums/post/54006593 "For those few images where you REALLY need to squeak out that little extra resolution, simply use DPP's DLO function. Here are some quotes from Canon Japan's website about DLO...
After passing the lens and before reaching the imaging element, the light beam is routed through filters designed to cut the infrared and ultraviolet spectrum as well through as low-pass filters to reduce moir? stripes. The low-pass filter, that affects image quality, cuts high frequencies (high spatial frequencies = delicate patterns) and plays an important role in avoiding the moir? effect.
Eliminating the low-pass filter would result in better image sharpness, but shooting would have to be done taking individual objects and situations into consideration. In other words, the camera system would lack proper balance to enable its usage in different situations.
*source: http://web.canon.jp/imaging/dlo/factor/index04.html
After passing the lens and various filters, the light has diverted from the ideal condition as it reaches the image sensor where the image will be formed. This is due to the influence of factors such as aberrations, diffraction, and the low-pass filter. If these influences can be compensated for using highly precise and specific data, the result ideally would be the original and optimal image. This is the unique principle behind the Digital Lens Optimizer. Factors contributing to optical image deterioration as the light passes through the lenses and filters in the camera were identified and converted into mathematical functions (optical transfer functions (OTF)). By applying the inverse functions to the captured image, the state of the light (image quality) can be returned to approach the state that the incident light had before entering the camera.
The factors such as aberrations, diffraction, and low-pass filter influence differ for different lenses and cameras, and they also are dependent on shooting parameters. The Digital Lens Optimizer therefore uses inverse functions that are carefully optimized and based on precise data. This makes it possible to compensate even for complex and asymmetric aberrations such as coma.
*source: http://web.canon.jp/imaging/dlo/effect/index.html
There's a lot more to that site than just the above quotes. Take a look. DLO is, IMO, an underappreciated feature of DPP and is (I'm guessing) why Canon has released DPP 4 - to HOPEFULLY convince Canon users to utilize this tool when necessary rather than depending on 3rd parties to "fix" image quality issues arising from Canon cameras and lenses. Because given Canon's focus on video, I just don't see them getting rid of the AA filter. They might, but it would surprise me."
RE your lens correction in camera, I've not used this as I rely on DPP to do that job. I suspect you will need to download the data to your camera, probably through the Canon software interface 'EOS utility' (that I suspect you may not be using) to get this to work. Again, others more expert can comment.
Hope that helps.
Cheers
Glenn