when itunes is telling you that required file cannot be found that means that you change the location of the file( go in itunes than in library add new file an select the photos)
if isn't this that means the photo sync is turn off, to turn on connect your ipod select the ipod in itunes and you have there summary,music,photos,etc. select photos and turn on photo sync
When syncing photos to your iPhone or iPod touch, you may receive an error message similar to this:
"Some of your photos, including the photo "PHOTO.JPG", were not copied to the iPhone/iPod touch "device name" because they cannot be displayed on your iPhone/iPod touch."
"The iPhone/iPod touch "device name" cannot be synced. The required file cannot be found."
If the photo(s) are verified to be in a compatible file format, and you continue to receive the error message when transferring photos to an iPhone or iPod touch, try deleting the iPod photo Cache and then starting the photo sync again.
There may be more than one iPod Photo Cache folder.