Dam, pretty big oversight by apple. So the only way I assume would be to take them off the device, rearrange them in iphoto, then sync my device with iphoto. Thats a pain if that even works.
That's precisely what you have to do right now, so being able to organize in iOS 5 is certainly a welcome addition. Where I really got bit was when I used iMovie (on iPad) to edit a video I'd shot on my iPhone and then transferred over to my iPad 2 via the camera connection kit. I made a nice little edit, posted it on Facebook, then later I synced my iPad and got the videos and photos off it. I went back into to iMovie and my project was munged because the source video was no longer in the Imported album, and it didn't recognize it being the same video elsewhere. There was no way that I could see to get it associate again with the project, so the project was no longer usable. I had to redo it from scratch. Hopefully iOS 5 and iCloud resolves all that. I think it does.