DDRcasey,
though not obvious, you can create an album at root to which you may then assign the permission to create sub-albums to LOGGEDIN user. Once the album is created by the user you can always move the sub-album to the root as admin. Granted it would be preferred to have a little New Album icon up top, however this workaround works.
I asked the same questions a few days ago (check forum.."new album confusion") and Signe was good enough to get me pointed in the right direction.
Cheers
Flying_monkey 