See also part 2
Updated for clarity.
This is an example of a best common practice VFX color space workflow used at Sony Dreamworks:
This book has some examples of DCP color space workflows:
In this book the author Glenn Kennel says that the standard DCP workflow is to retain the film look on the digital version of the film instead of making it more saturated. A similar 3D lookup table (LUT) (film stock emulation 3D LUT) that was used to grade the film on a P3 projector can be used when making the DCP.
Arri Alexa whitepaper:
In this Arri Alexa whitepaper Arri have some suggestions for color space workflows using their Alexa Digital Video Camera. They suggest you can use a bleach bypass LUT on dailies if that is the look you intend to use on the final product.
They say it is possible to use a film stock 3D LUT for grading Alexa footage, but they warn that each channel of a film stock has a different gamma so you need to compensate for that.
Afer Effects Color Managment white paper:
Another resource is the color management workflow whitepaper for Adobe After Effects, Adobe suggest and describes how you can add a adjustment layer with a theater preview when making a image sequence intended for DCPs.
Some thoughts on low budget DCP color space workflows:
In “Color and Mastering for Digital Cinema” the author explains how the 2.6 gamma 12 bit, DCI XYZ color space standard of DCPs was made for the standard Digital Intermediate workflow of 2004 which uses P3 projectors for grading.
In 2011 you have more options when choosing a workflow: You can order LUTs from http://www.lightillusion.com/ cheaply and use them on digital intermediate files with software like Fraunhofer Easydcp +, After Effects and Davinci.
You can shoot video with lenses on SLR with settings that mimic 35mm Log curve (Technicolor Cinestyle)
Or use easy to use film look software (Magic Bullet Looks 2.0) that can emulate different film looks.
It is now cheaper to use similar workflows to the ones big budget productions used in 2004. But big budget post production workflows have access to a P3 reference grading projector. This is still expensive. Even if low budget productions intend to directly convert to DCI XYZ from Rec 709 and retain it´s white point, colorspace and gamma the greys could seem darker and your picture could seem more washed out because of less luminance (14 ftl) in the cinema than on your monitor. A computer monitor or TV could have more than double the luminance of cinema projection. That is why what could look like a film look on your monitor could look less like film when watched in the cinema.
In the Alexa whitepaper they suggested watching material shot with the Alexa with a bleach bypass LUT and this attraction to the desaturated look from 35 mm seems to be common in DCP color space workflows.
This attraction to the look of 35 mm is also seen in the choice of low budget SLRs that have film camera optics.
For a good looking DCP that looks more like Hollywood films shot on expensive cameras and graded on p3 projectors it seems low budget filmmakers should also try to mimic the projector based grading workflow.
Even though they can not afford to view the material in the full dynamics of 12 bit or in P3 color space, a projector that is calbriated for 14 ftl could help. http://www.lightillusion.com/ has examples of calibrated grading rooms. Other suggestion could be to grade in LOG or applying a S Curve. The goal is to get contrast rich pictures but also keep lots of details in the greys.
Digital has the possibility for much more saturated colors than 35 mm and if you want to see what DCI P3 is capable of you can go for a distinct non 35 mm look and use the saturated colors from an Arri Alexa. You could do this even though the footage is seen on displays with less saturated colors most of the time in the production and post production of the film by using 3D LUTs. This may be the future of DCP color space worflows, even though most worfklows now mimics the look and feel of desaturated 35 mm.