Configuring Your iPod Folder
When viewing an iPod folder, you will see two panes in the iPod Folders window. The pane on the left displays all the libraries you have in your iPhoto Library Manager library list, and the pane on the right displays the albums in whichever library is selected on the left. You can add a single album of photos or a whole library of photos to the iPod folder by checking the checkbox next to the album or library you want to include.
Checking a library will include all the albums in that library, including any additional albums you add to that library at a later date. If you want to include most, but not all of a particular library, first check the library, and then uncheck the albums you don't want to include.
You can also just check individual albums that you want to include in your iPod folder. If you check a folder album, all of the regular albums that it includes will be included in the iPod folder. However, this folder hierarchy will not be recreated in the iPod folder, because the iPod only supports a single level of folders when it syncs your photos, so any subfolders would be ignored anyway.
If multiple albums that have the same name are included in the same iPod folder, one or more will be renamed in order to avoid conflicts. For example, if you have a "Vacation" library and a "Family" library, and both have an album named "Dinner", you will end up with two subfolders in the iPod folder, one named "Dinner (Vacation)" and "Dinner (Family)". If identically named albums come from the same library, they will be named "Dinner", "Dinner 2", and so on.
New in iPhoto 7 is the ability to hide some of your photos in your iPhoto library so that they don't appear in your events or albums, even as they are still stored in the library. Hidden photos cannot be included in an iPod folder, and must be marked as unhidden in order to be copied correctly. Simply showing the hidden photos in iPhoto through the View menu is not sufficient - the photos must actually be unhidden in order to be copied to the iPod folder.
Unregistered users are limited to having no more than 100 photos copied into their iPod folder. If you specify albums containing more than 100 photos, only the first 100 processed will be copied into the iPod folder.