Q: iPhone 4S: Can't sync photo albums since latest update

I have never had any issues syncing my photo albums to my iPhone from iTunes until the latest iTunes update.

As soon as the iTunes update (10.6.3) was completed, I plugged in my iPhone (5.1.1) and got an error 1140 message (I tried several times, including after restarting my computer, with the same message appearing every time). I later realized that in the "photos" tab in iTunes, "all photos and albums..." was checked (prior to the update, I had selected several albums as I do not have enough space on my phone for all of my pictures).

However, I cannot select the "selected albums, events, and faces..." as it is greyed out.

Any thoughts?