actually i've never put photos on my ipod.
however i would think that adding them via itunes > ipod > photos would be the proper way if you want them to display on the ipod.
perhaps it has something to do with the type of ipod you have. you say you have an ipod nano. do you mean the older generation with a click wheel or the newer generation with a touch interface? the older ones were about 3" x 1", the new ones are like 1" x 1". maybe the new smaller versions do not support photos. look on your ipod, at the main menu is there a photos> menu item?
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that said, you could put photos (or any file for that matter) on your ipod and use the ipod as a "usb memory stick" by enabling "use this device as a disk drive" in itunes on the main device information window. this will allow you to put files on it and view/add/delete from this directory on any windows pc with a usb port (you need to bring the cable though)
quite handy, i keep a cable in the car.