Serious Issues with iPhoto Library Rebuild Function

I have a 3rd generation iPod touch. Have had it for a little over a year now.
I've had problems with the "Library Rebuild" function when saving photos from the internet before but never anything serious.
However, lately it has been triggering multiple times daily. It takes over half an hour to complete. Occasionally will continuously restart until I shut the iPod off for a while. And deletes many of the pictures I have saved each time it runs. I've lost close to 500 pictures in one "library rebuild" before and with this happening every couple minutes while I'm browsing the Internet it's getting very frustrating.

I guess my question is; what triggers the rebuild and how can I prevent it/disable it all together.