I recently gave a presentation on Install Profiles in Drupal 6 and 7 at the Broward County Drupal Users Group. I use Install Profiles in conjunction with Drush Make in order to speed up development times, and automate as much repeatable steps as we can so we can focus on the custom work each website needs.
There are many steps that need to be repeated for a base Drupal install that can be solved by using Install Profiles, but most people have not bothered to create their own. They’re actually quite simple to make. This presentation is a brief introduction into the anatomy of a Drupal Install Profile, the differences between 6 and 7, and a couple of basic code examples to get people started.
There will be audio of my presentation soon - once that’s released, I’ll post a link to that here as well. There’s some good discussion on Install Profiles versus Features in the audio. The general summary of Install Profiles versus Features is that Features works better for defined tasks and sections, while Install Profiles are good for general configuration that can be accomplished at install, such as creating input formats, an administrator role, and setting a default administration theme.