I just wanted to say that I am really beginning to understand, as a user of my own software, how useful subalbums will be!! I have 10 [i]pages[/i] of albums on http://www.trisweb.com/photos and they're completely useless after the first page.
I'm going to have to make a theme that has several displayed sections... "most recent albums", "most recent images", and "all albums, neatly organized."
I guess this is just for everyone to know -- I'm working on it

Currently we have the basic scaffolding for subalbums working, which is easy, but now we need to make it all work with the administration panel and the themes, especially the included ones.
Also, I tried some of the performance improvements I talked about in the Wiki, and the results so far are phenomenal (around 4-8x reduction in processing time), especially for albums with 100+ images, and galleries with lots of albums (like mine). These improvements will come along with subalbums in 1.1 sometime this summer.
Until then, a 1.0.3 release is due out this week (probably tomorrow) with lots of bugfixes and more security fixes, as well as improved image processing (custom sizing and cropping) and loads of other good new features. Stay tuned...