For those interested in the chemistry of it, IIRC, (this is basically from memory, so it could be wrong or not entirely accurate), your wort (if not converted) will contain starch. Starch is polymer chains of glucose, specifically amylose chains and amylopectin chains. The amylose contents are soluable in water, so literally non-converted wort *should* have uniform dispersion (at least to the points where we're concerned).
So in comes the iodine. We drop the iodine in water (or in our case wort), and it disperses, but it's not particularly soluable (that's why when you drop it in it looks cloudy and you mix it up and it it tints the water, but doesn't lose it's color until a significant time afterward). When mixed with water or in our case wort the iodine molecule slips into the center of the helical amylose glucose chains of the starch... The bonding of these two molecules changes some of the properties of both the original molecules and one of those changes is to absorb a large part of the visible light spectrum. However it doesn't absorb short-wave light, and thus produces a deep bluish-purple or black color.
IIRC it does not however do this with amylopectin...
I'm sure Thomas could explain it better, or more accurately, but if I recall that's pretty much what our high-school chem teacher taught us. Mind you we actually had chain models of the starches, and there was some math involved, and it was years ago, so take this all with a grain of salt, or a big rock of salt, or whatever.