I've synced my iPhone with one of my photos folder which is about 250 MB, as you can see here. iTunes "optimizes" them by resizing them to a lower resolution and then transfers them to the iPhone. Except they take up almost two times more space on the iPhone than the originals do on the computer, which are at full resolution. The originals are JPGs saved by Photoshop at maximum quality (12) which is about as large as you can get. So iTunes somehow manages to double the file size when lowering the resolution. What's up with that?