DUKENUK12  ok, i couldnt figure it out for the life of me and someone's complaint was my answer. after sifting through complaints regarding the iphoto problem - if your iphoto library is stored on another disk (external), connect 360 will not find it - i found the fix. create an alias and put it in the pictures folder on your local disk. remove the "alias"tag at the end of it so it is just called "iPhoto Library" and BAM, connect 360 starts indexing. maybe most of you knew that but i saw that a couple people were having this issues and google-ing it got me no-where so this is me putting in my google contribution to answer some frustrated users!  
(Version 3.35)