I'm not aware of a way to physically delete the folder, however I found a way (with a little help from Google) of removing it from your desktop:
- open itunes.
- delete the ipod photo cache
- plug in your iDevice (ipod, iphone, ipad)
- watch the ipod photo cache magically appear.
- click on the device in the side bar of itunes
- go to photo sync tab
- if the box isnt ticked, then tick ‘sync photos’ (trust me)
- pick a folder to sync that isnt your desktop [like your photos folder]
- itunes will complain and will say ‘im going to delete the photos on your iDevice (it will not delete any photos TAKEN by your iDevice, only photos that have been synced from your mac or pc to your iDevice)
- hit ok and let it sync to the new location (its ok if you dont actually want to sync to here, you will disable it in a minute)
- once it has synced, go back into the sync options and turn off sync photos.
- it will then delete all the photos it just synced
- you will now notice that the ipod photo cache isnt on your desktop [its been moved to the place you just synced to, ie your photos folder]
- enjoy not having to delete the ipod photo cache every time you plug in your iphone or ipad
This method basically moves the folder somewhere else so you don't have to see it/delete it every time you sync. If you do find a way to permanently delete it, please share!