Make sure you install iTunes 4.7 (included on the iPod photo CD) before you use your iPod Photo. If you don't update:
- iPod photo will skip songs purchased from the iTunes Music Store (going to the next song in the playlist).
- No album art will appear on the iPod photo.
- No photo options will appear in iTunes preferences.
You can also download and use the latest version of iTunes here.
Make sure you also have the latest updates for iLife '04 to use with iTunes 4.7.