This sorting problem is all very frustrating; here's the details on mine:
I use iPhoto Events (not Albums, not individual pictures) to organize all my photos and videos. There have been several wasy to sort Events with iPhoto, the most recent of wich (iPhoto 9.4.1) is to select "Events" in the iPhoto Library pane, then select "View" in the iPhoto menu, and choose your sorting method.
The order you select is NOT preserved when you connect a device via iTunes (iPod, iPad, iPhone) and select the "Photos" pane of that device.
The 3rd party iPhoto Library Manager will reconstruct your iPhoto library, recover a number of lost or orphaned photos and videos, and sometimes (I don't know when) will some how help iPhoto convey the event order to iTunes (I have accomplished this once, and can't tell why anymore?).
But the problem seems to be the .xml file that iPhoto writes a file called "AlbumData.xml" (use right click or control click on iPhoto.library to "show contents" to see the file), which either contains incorrect sorting data, or if correctly written by iPhoto, is not read correctly by iTunes.
It may be this .xml file that is referred to as the "iphoto cache" the previous post of lauriew?
In any case, there IS a serious sorting problem and it is about the connection between iPhoto and iTunes. Why Apple doesn't pay attention is a mystery to me. I have posted my concern, and done all of the Microsoft support like "restore your device, etc." tactics, and nothing works. I have posted my description of the bug on the Apple feedback site multiple times, and have spend hours in the Apple store with their "geniuses" who file reports, to no avail.
It is an interesting sociological question: when will Apple the corporation actually start paying attention to the current users as opposed to scrambling for new ones? If it does not, it will start to suffer the collapse that is now happening to Microsoft.
Randy