I waffled on where to post this, finally decided it fit best in this Forum.

Bought my wife a new MBA and transitioned her to it last month. Almost immediately she noted that her photos were not syncing to her iPad (everything else seemed to work fine). Being busy at the time, I gave her a generic list of things to check on the preference settings in both iPhoto 11 and iTunes (10.4) but the problem persisted.

This weekend I had the time to look into it figuring a few minutes and I would be done (wrong!). Everything seemed to be set properly but whenever I synced iTunes would give a message that XYZ.jpeg photo was not copied because it could not be read on this iPad.
I tried deleting and then reimporting the problem photos but that did no good. My final soloution? I imported her iPhoto Library into Aperture (vs 3.0) and set her iPad to sync photos from that. Works fine, but still don't know what the issue was with iPhoto.