You can sync photos from a pictures folder (Windows & Mac) or iPhoto (Mac). iPods can display images in .jpg, .gif, .png, and .tif formats. To transfer photos, connect iPod to the computer. In iTunes, click the iPod's name under Devices. Click the Photos tab. Check the box next to Sync Photos. Click the Apply button. Each time you connect the iPod to the computer, the photos will be updated.
To access the photos, select Photos from iPod's Main menu. Then choose a subfolder or album to display a thumbnail list. Select a thumbnail to see a full-screen image.
Keep in mind that photos don't have to be limited to pictures from cameras. Slides from presentation software like PowerPoint or Keynote can be exported to .JPG format and loaded onto an iPod. The images above come from The Elements of Art PowerPoint slide show found on Elementary Presentations page. I exported the slide show from PowerPoint as a series of JPGs. I loaded the JPGs into an iPhoto album. I used iTunes to sync that photo album to an iPod.
iPresent It ($18) from ZappTek allows Windows and Macintosh users to convert PowerPoint or PDF presentation into photos to be displayed on an iPod.
For lots more information about the Photos function read iLounge's
Listen to iPods #9: Photos Part 1 for a how-to and tips on syncing photos and presentation slide shows.