One example of a situation where it may be
necessary to adjusting color balance is when photographs are
taken under artificial light made using film designed for
daylight. Artificial light, especially from incandescent
tungsten light bulbs, is often rather yellow. (This is
because the white-hot tungsten filament is much cooler, at
about 3000K, than the surface of the sun, at about 5000K).
Note that digital cameras usually have an 'automatic white
balance' feature that almost eliminates this problem, but
the automatic white balance can itself cause false color
rendition if the picture includes large areas of the same
color. Red sunsets for example, might look too pale because
the automatic white balance always tries to eliminate any
overall color bias in the picture. The following photo was
taken in the Paris metro under fluorescent lighting which
often gives photos a green cast.

To adjust the color balance, choose Layer>Colors>Color Balance. Make sure that preview,
midtones and conserve luminosity are all selected, then
slide the color sliders until the metro station has a gray
tint rather than green or brown (think of brown as dark red
when you are making this adjustment). I find that it is usually
not necessary to change the balance for highlights or
shadows, only for midtones. Save your picture once you have done
your best to correct the color balance, and remember that
the GIMP cannot do miracles and that sometimes the result
will be less than ideal. A photograph taken underwater
without flash, for example, is always likely to be lacking
in red, even after color adjustment, since it is likely that
all the red light will have been absorbed by the water.
You may be interested to know that the GIMP
can attempt to automatically balance colors as well as
adjust brightness and contrast - choose Layer>Colors>Auto>Equalize and check out the result. Sometimes the result is
good, but in this case I find the result too blue and too
harsh. If you are a perfectionist you will probably NOT want
to use the automated adjustments.
Surprisingly, Layer>Colors>Auto>White Balance
does not seem to fix the color balance problem - is
this feature just not yet finished in the GIMP?