As for absolute cropping, I agree with your stance. Until the layout is fixed, preserving your ability to easily manipulate photo size and positioning is key.
Some clever image management methods have been described in the discussion forums, and one that appealed most to me was the use of duplicate linked image folders. Having a high-res (CMYK) folder and a low-res (RGB) folder to switch between for different output enables you to use both to your advantage. Use the low-res images for layout, for internal proofing, and for EPUB/online PDF/HTML output. Then it's simply a quick switch to the high-res image folder for print purposes. You can easily prepare the alternate collection of images with a Photoshop batch convert script or with the Photoshop Image Processor. Save your presets!
...will the PDF file compress better if the images are cropped prior to placing them in Indesign?
I have an employee that insists images need to be cropped to actual dimensions before placing in the InDesign document.
"Compress better" is a rather nebulous reference. Nevertheless, there is an option when exporting to PDF (on the Compression page of the Export PDF dialog), which allows you to elect "Crop Image Data to Frames" so there is no need to do it beforehand.
Thanks for the great replies dsoileau and John. Both answers have very useful tips.
I would prefer to have images in the original color mode of RGB - at 300ppi. It gives you a wider gamut that's more flexible, that you can adapt for various outputs: print - litho / digital; screens; and eBooks of various kinds.
What do others think?