Here is some info from the web:

Possible indicators
Clues which indicate that iron bacteria may be present in well water:

Tastes and Odors - Iron bacteria often produce unpleasant tastes and odors commonly reported as: "swampy," "oily or petroleum," "cucumber," "sewage," "rotten vegetation," or "musty." The taste or odor may be more noticeable after the water has not been used for some time. Iron bacteria do not produce hydrogen sulfide, the "rotten egg" smell, but do create an environment where sulfur bacteria can grow and produce hydrogen sulfide.
Color - Iron bacteria will usually cause yellow, orange, red, or brown stains and colored water. It is also sometimes possible to see a rainbow colored, oil-like sheen on the water.
Red Slimy Deposits - Iron bacteria produce a sticky slime which is typically rusty in color, but may be yellow, brown, or grey. A "feathery," or filamentous growth may also be seen, particularly in standing water such as a toilet tank.

Posted at http://www.answers.com/topic/iron-bacteria?cat=technology

Seems to be a problem when in your well or toilet.

Here is a blog entry about Thiobacillus ferrooxidans [Iron Bacteria] in ponds. http://arch.ced.berkeley.edu/kap2/php/Hidden_Ecologies/?p=323Not sure what this all means.