http://forums.adobe.com/thread/986004?tstart=0

All my colour settings/profiles are synced, the documents are both RGB. I just can't work it out

Yes, but what profile of RGB? Adobe? sRGB? ProPhoto? Are you embedding any profiles etc?

If you are finding the colors getting "muted" as you paste in Photoshop and then worse as you export to web, it sounds like you are going from a larger gamut RGB profile down to the smaller gamut sRGB.

• Were both documents always in sRGB?
• When you go to 'Edit > Assign Profile' in Illustrator, is sRGB assigned?
• When in Photoshop and you go to 'Edit > Convert to Profile', is the document in sRGB?
• When you export for web, is either the embedded profile box checked or the 'convert to sRGB' box checked?

Can you show a screenshot of the image in both applications before and after pasting?

the colors will not match if you are using different color spaces.

In Photoshop and Illustrator make sure that the color space (color profile) of the both documents is the same. In both programs you can check that by using this menu - it is at the bottom left corner of the document window:

If  it says "Untagged" then the color space used by the image is the one selected for the working spaces for the used color mode in  your color preferences. Make sure that both programs have the same working spaces in their color settings and both are using the same color modes RGB or CMYK which is indicated on the title bar of the documents.

Also have in mind that if you have Proof Colors checked in the View menu in any of the two programs this will display the image in the color space checked in Proof Setup from the View menu which may be very different from the color space of your documents and the color settings.