iPhoto '08, iTunes and iPod -- won't work together?

[skybolt]

I upgraded to iPhoto '08 last weekend. I have most of my photos on an external, and did not update them to '08 yet, but the ones on my internal did the standard update in format. Now iTunes cannot sync that internal library to my iPod. When I navigate to the library on the internal from within the iPod sync screen in iTunes, it is grayed out and cannot be chosen. When I navigate to the library on my external, I can sync that. Don't mind that so much for now, but do want to ultimately convert those photos to '08, but not if I can't get them onto my iPod.

Along with that, when I do select the file to sync, my organization (albums, rolls, etc.) are not showing. I can only choose "modified", "original" and/or "data". How can I get my organization into my iPod?

Any help is greatly appreciated!