would it be possible to have zenphoto support subfolders?

Possible, of course. But let's elaborate a bit...

By this do you mean "albums within albums" or just that you can keep subfolders in the file structure and have images all displayed in the same album? I assume the first, but have to make sure.

Also, how would it be best to display subfolders or subalbums? Would you want them somehow separated from the images in the album, or would you want them like the images, only always first and signified somehow? What'd be best?

I meant "albums within albums", and like you said, i think they should be like images for continuity but perhaps highlighted with a different color (which could be done css right?)

I would love to see subfolders as well. For example, I would like to organize my pictures by country since I travel a lot. So in my case have a big folder for all of France and all of California or something to that effect. However, the more I think about it, the more I realize this could simply be done through tags.

Oh yes please do this, this is one of the cleanest looking photo galleries I have ever seen, took me a bit to get the install worked out properly. Finally pretty much have everything working. But I really need sub directories to display.

Gotcha. I'll add it to the list for the 1.0 release.