I'm having the same problem everyone else is - iPhoto has a library full of stuff. iPhoto 'sees' it, Keynote 'sees' it, Pages 'sees' it - iTunes doesn't! I have found a quick workaround for those photos I really need to have on my ipad right now! Export them out of iPhoto into a folder in the Pictures folder. iTunes lets you sync with iPhoto or photos in another place and it will sync just fine with photos in the folders (i.e., albums) in the Pictures Folder.
Until Apple releases a fix, this seems the simplest process for my need and maybe it'll help someone else in the short term.