Why does restoring a photo from Time Machine only restore the original in iPhoto and not the edited version? I have recently restored few pictures from Time Machine into iPhoto. I noticed that the Time Machine restored the files, but didn't restore the changes (editing etc.) I had made.

The point is that I am planning to reinstall the whole system on my mac and than to restore files using Time Machine. I would also like to have my photos with my changes. Do you have any ideas?
an complete TM restore restores your entire computer as the time when it was backed up.

my qualified guess is that when you restored your indevidual pictures, you restored the original file, and not the edited vertion, 

give it another go, and make sure you choose your edited file if you want to be sure!