I am trying to download photos from my PC to IPad.
I tunes wants to erase existing photos on the IPad. How do I add new photos folders to existing folders on the IPad?

You can't !!!
That is the dumb way that Apple's iPAD works in regard to pictures.
It can only sync ALL pictures through iTUNE.
So iPAD expect you to keep all your pictures all the time on your PC.
It expect you to add or remove pictures on your PC directories.
Once you are done and the directories are ready - You Sync through iPAD

Luckily, there are lots of 3rd party applications that over come that problem.
And you can find reference to them hear on the forum.

read here :
Transfer Photos From iPad to PC - Only Copies!

I have found the easiest way to add large numbers of photos that are or significant size is to load them from a folder on the computer onto a camera memory card via a card reader and then from the card reader to the ipad via teh USB adaptor that comes as part of the camera connect kit.

One trap / potential issue is that the Ipad will only pick the photos up if the memory card tricks the Ipad into thinking the memory card is a camera.
To do this the following structure and rules apply:
Folder on the memory card must be labelled DCIM
Inside this folder is another folder that has the photos in it that you want downloaded.
This second folder has to have a name that comprises 8 numeral or alaphabet characters (i.e. no dashes, dots, spaces question marks, etc)

While the process is a pain, I have tried several other methods including purpose specific 3rd party software applications that use Wi fi, e-mail to myself, uploading and downloading to Drop box, but all that I have tried are very slow. Direct transfer as above is quick.

I think this can be done by clicking on your iPad under Devices in the left column of iTunes. Then in the right side select Photos, sort of like the photos tab. On your computer (mine is Windows XP) create a folder in your My Pictures folder and fill that folder with the pictures you want. In the iTunes photos tab of your iPad you have a check box next to "Sync Photos from [pull down menu]. Check the box. My folder is in the My Pictures folder inside the My Documents folder on my computer. So, I have My Pictures chosen in the pull down menu. Right below the check box line is a selection of either All Folders, or Selected Folders. I chose Selected Folders. There is also a choice to include videos, if you want. Below that area is another area entitled Folders. This has a list of the folders inside the folder you chose on the first line with the pull down menu. Put a check box in the folder you want to add to your iPad. Then sync your iPad with iTunes. Like magic the folder will appear in your photos app with all of your pictures that were in that folder.
While testing this out I put a folder on my iPad. Now to figure out how to remove it. :-)

Sent from my iPad using iPF - Peace

[edit] oh, yeah you have to choose the apply button on the photos tab to make your choices happen. Mine automatically synched at the pressing of the apply button.
Unchecking the Sync Photos from check box prompted me with a do you want to remove the pictures from the iPad.