Hi there,
This could be a number of things, so I'll run through them one at a time. Sorry if it is long winded.
THINGS YOU NEED TO KNOW BEFORE YOU TRY AND FIX THIS
First of all you need to remember that iPhoto Albums are like iTunes Playlists, they are not actually files, just a list of files, selected from your master library. Think of them as bookmarks, or flags. When you create an Album or Playlist, you are not moving any files, just creating a shortcut of links to a selection of photos or music.
The second thing to remember is that your iPod interacts with iPhoto based on whatever you have setup the iPod preferences in iTunes to be. When you connect your iPod, it will appear in the Devices menu in the left hand side of the iTunes window. When you click on it, a screen with your iPod will show up. There will be a series of tabs at the top. One of them will be "Photos". This is where you tell your iPod what to do with your iPhoto photos. I recommend you do NOT select "Include Full Resolution Photos". Just tick the box "Sync Photos from iPhoto" and select "All photos and albums". This means everything in iPhoto will come across onto your iPod in the same way. (You organise your photos in iPhoto, not iTunes or iPod.) If you can't see any of these screens, update to the latest iTunes (7.3).
Your original photos are in a folder called "Originals". Any modified photos (rotated, cropped etc.) are in a folder called "Modified". iPhoto also creates previews of your photos in a folder called "Data". All these folders can be found in: YourMac/Pictures/iPhoto Library.
WHAT COULD BE CAUSING YOUR PROBLEM:
The folder "iPod Photo Cache" will only fill up with files when your iPod successfully syncs photos from iPhoto.
The reason it might not be working is probably that you have too many photos. How big is your iPod? 8Gb? 30Gb? Then check how big the folder "Originals" is. If it is too big for your iPod, then the iPod will cancel the transfer and your "iPod Photo Cache" folder will remain empty. You can find out how big your "Originals" folder is by Control+Click and select "Get Info". A window will pop up telling you how big it is. (It can a few moments to count it all up.)
HOW TO SOLVE THIS
If you have too many photos for your iPod, then you need to tell your iPod which iPhoto Albums to transfer. You can do this in iTunes. Go back to the iPod settings in iTunes. Click the "Photos" tab. Select "Selected Albums" and choose which ones you want in the list below. You will need to create a new album in iPhoto called "iPod Collection" or something, and drag your favourite photos into that album. Then the name of that Album will show up in iTunes and you can tell iTunes to sync photos from "iPod Collection".
The first time you sync photos to an iPod it can take a long time. Allow up to 15 minutes for it to transfer lots of photos.
You can see how full your iPod is by looking at the coloured bar at the bottom of the iTunes window (when you are clicked on your iPod settings). It shows you Music in Blue, Photos in Yellow and free space in White. This will tell you whether you have enough space for your photos or not.
Let me know if you need any more help, but I'm pretty sure that's your problem.
Neal
P.S. Teacher in China? That sounds cool. How do you become one of those?
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