Ok, so a few of you are on the right track; unfortunately Said606 is not. My $4.99 experiment to buy the iOS iPhoto version results in exactly the same problem as before. iTunes does NOT correctly interpret the sort meta data created by the Mac OS X version of iPhoto.
The problem is NOT sorting photos within an event, it is that the movement of events from iPhoto to iPhone (regarding of the app used on iOS) screws up because of iTunes. Full stop.
So we are still waiting for Apple to solve the simplest of fundamental computer science tasks. Preserving sorting order across data transfer (regardless of how the meta data is stored and used). This is Computer Science 101, Apple...get on it.
Cheers, Randy