I've talked to HP support about the photo sorting issues when using local photos. Apparently it sorts on a combination of date/size that ends up in a consistent sort, but not one that makes any sense to the viewer. I had tried name indexing and modifying the create/modify/date taken/accessed date properties and I could not get it to order the photos in chronological order (ascending or descending).
Snapfish sorts newest to oldest with 3.0.2 and also the images are sized smaller than the touchpad resolution (you can see this by making a pic your wallpaper - gets boxed).
Photobucket seems to be the best answer for those of us that want a Photo Album of 1000's of photos on the Touchpad. I create an album for each year and then upload my photos to Photobucket in chronological order. They come down to the Touchpad in the same order and are the same or larger resolution than 1024x768. It's working for me, but I'd still prefer to copy my own images.
To me the biggest faults with the Photo app are:
Sorting and/or Filtering - doesn't work. Ideally, I would like to have calendar search or filtering so I can keep all of my photos in one album and get around using the calendar.
Lack of quality zoom - Being able to send over 10 megapixel pics and be able to zoom them at full quality would be ideal.
If they could get those things fixed, it would be a basic photo album that works well.