How can I create a new folder in the photo album?

I don't believe it is possible to do this on the phone itself -the Photo app has never allowed making new albums on the fly (that I know of). Here's a work-around:

When you sync your phone to your computer, go to iPhoto or whatever picture app you use to organize your albums. Your 3G camera roll should be there somewhere. Leave your iPhone 4 pictures in there, but drag the rest to a new album called 3G Camera Roll (or something like that). Then re-sync your phone. That should put your old camera roll as a discrete album, while continuing to add new pictures from your iPhone 4 to the official camera roll.

Hope this helps. 😉

For windows pc's Photo albums:
1) Create a master sync folder on your pc with no photo files at the root level of the folder.
2) Create sub-folders within the master sync folder with the subfolders named what you want the ipad's photo albums to be named.
3) Place the photo files you want to sync in the appropriate subfolder within the master sync folder.
4) In itunes on the photos tab, select the master folder as the sync folder.
5) After syncing, each subfolder will be an album on the ipad with the proper photos contained there-in.

I have followed your advice since nothing else was working but...
i did not succeed. I had originally 56 pics and when I try to upload 215 pics via master folder and sub folders I only got 56 pics installed.
I'm going crazy and this is a BIG BS from Apple!

Please let me know if there is any other solution
Thanks
sam

I have the same problem. I have no idea where my photos are syncing to when I sync with iTunes. I know they're syncing because when I went from the month-old 3GS to the new 4 back in the beginning of July, all the pics from my 3GS were there. When I click on the Photo tab in iTunes, it's not like the app tab that shows me all the apps. Only thing Photo tab does is ask if I want to sync all my photos from my computer. NO! I have every picture I have ever taken with every digital camera I have ever owned, thousands of pictures dating back to 2007. I don't want to deal with all those old pics, I just want to organize the pictures that I have taken on my iPhone! Right now, I have 164 pictures in the camera roll and I can never find what I'm looking for. This shouldn't be this complicated!

I'M FED UP WITH THIS BS CAMERA !

I'LL CHANGE IT !!!

I was so frustrated at iTunes for last 24 hours trying to sync data to the iPhone. So many problems with it crashing or not syncing, but finally finally finally got photo albums ontothe phone. Now one thing is that there is an additional album called photo library that most certainly did not exist in my root photo folder when I got it to sync. But this folder has all of the photos from every other album on my phone! This cannot be what Apple has intended to happen - surely something must be wrong. Why have everything duplicated?