Why does iPhoto create subfolders for an album?

Question

I have have about 20 albums in iPhoto, and I've never had an issue until recently. I created a new album, and have been dragging pictures into the album over the past 4 months or so (it's to update progress on the construction of our new house). When I drag photos into the original album, iPhoto creates a subfolder within the original album. The outcome is that I have 92 "untitled album"s within the original album. Worse, when I sync my phone and want to have this album on my phone, the original album doesn't show up on my list of albums, but the 92 untitled albums do. Is there a setting that I'm missing? This had never happened with the other 20 or so albums I have on iPhoto.

Answer 1

Try the following:
1 - delete the iPhoto preference file, com.apple.iPhoto.plist, that resides in your
     User/Home/Library/ Preferences folder.
2 - delete iPhoto's cache file, Cache.db, that is located in your
User/Home/Library/Caches/com.apple.iPhoto folder (Snow Leopard and Earlier).
or with Lion and Mt. Lion from the User/Library/Containers/com.apple.iPhoto/
Data/Library/Caches/com.apple.iPhoto folder
3 - launch iPhoto and try again.
NOTE 1: If you're moved your library from its default location in your Home/Pictures folder you will have to point iPhoto to its new location when you next open iPhoto by holding down the Option key when launching iPhoto.  You'll also have to reset the iPhoto's various preferences.
NOTE 2:  In Lion and Mountain Lion the Library folder is now invisible. To make it permanently visible enter the following in the Terminal application window: chflags nohidden ~/Library and hit the Enter button - 10.7: Un-hide the User Library folder.
OT