How do I keep Itunes from adding photos to the photo library when I create photo albums for example I have a folder named Aircraft and so when I sync my phone it puts the aircraft photos in the aircraft album and in photo library I only want the photos in that category and not twice.
The photo library is all the photos you have on your iPhone. It doesn't actually put them in there twice, it just gives you an option of looking in one location for everything (in case you don't remember which folder you put it).
So....your library is you full data base(of photos) and your folders are filters through which you can more easily find a particular photo in that data base. It is not taking up twice the space if that is your concern.