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Try following instructions below.
Set photos to sync
You can sync iPhone with photos in iPhoto 4.0.3 or later on a Mac, or Photoshop Album 2.0 or later or Photoshop Elements 3.0 or later on a PC. Or you can sync with any folder on your computer that contains images.
Click the Photos tab and select "Sync photos from:"
From the pop-up menu, do one of the following:
If your using a Mac, choose iPhoto or your Pictures folder.
If you're using a PC, choose Photoshop Album, Photoshop Elements, or your My Pictures folder.
Choose Folder, then choose any folder on your computer that has images inside.
Choose "All photos," or choose "Selected folders" or "Selected albums" and choose the folders or albums you want to sync.
For other Syncing info Check out this article:
http://docs.info.apple.com/article.html?artnum=305741