It would be interesting to see an example of how this works.
The Stata Journal website says: " For compatibility=20
with sjlatex and TeXShop, you must enable the=20
Typeset -> TeX and Ghostscript mode." Yet you claim that=20
this is not neccessary and that pdflatex works directly with eps=20
figures if epsfig is invoked.=20
Erik is correct. What I was missing was that TeXShop is switching to
Typeset->TeX and Ghostscript when I am typesetting a document that
includes \epsfig calls. The direct call to pdftex (pdflatex) will work
when PDFs are included, but not when eps are included, in TeXShop.
However my prior comment re B&W vs color stands: there is no problem
including color eps files via that method.
Erik, please set your mailer to prevent winmail.dat from cluttering up
the list. You may not see it, but we do. (Someone with a URL of
homepage.mac.com is sending mail from Windows?!? My condolences!)