I can't find a way either. Here's what I gather it will have to be. I have to put ALL of my photos in the Photos folder. Inside that folder will be whatever I named the folder to sync in iTunes. (In my case, iPad Pics.) So if in that folder I have pictures of (just to use fake categories) girlfriends, dogs, bike, cars and house, I can create other folders on the iPad for each of those categories, and then copy the pics that belong in those folders to the right place. That will NOT remove them from iPad Pics, but when viewing, if I want to show people pics of just my dogs, or just my bike, or just my..... I have to do it in those subfolders rather than in the iPad Pics folder.
Do I have it? I don't want people to see pics of my girlfriend when I am trying to show them my bike, so I have to use subfolders and forget that main iPad Pics folder is even there.