Other's have used this method without Photoshop an it works, so if it is not working for you there is something else wrong.
So let's go over this one more time, in detail, just to make sure you aren't missing a step.
Create a folder on the computer, name it something like iPadPics.
Create several subfolders inside the first folder. Each of these folders is intended to be an album.
Copy pictures into each of the album folders.
Go to iTunes and select the folder to sync under the Photos tab.
You should now have a list of the subfolders on the page.
Select each folder you want to sync.
Sync.