Personally, I think that Flash is a great application for handling photo albums. That said, a photo album is definitely an intermediate-level application, because as CoffeeChef said, you will need to be using Flash, XML, and dynamically-loaded images and variables if you want to give the client the ability to update the photo album.
The photo album component that I've used most often is
SlideShowPro. SlideShow Pro is hugely customizeable, easy to use, and well-documented. I've never had troubles with SlideShowPro galleries getting buggy or breaking or anything like that. It also supports video. They also sell SlideShowPro Director which is a very slick CMS that allows easy updates of the images, complete with automatic thumbnail generation. And the price tag is cheap ($29 each for SlideShowPro and Director). The only negative at all that I can think of for SlideShowPro is that it does not work in ActionScript 3 sites

They say they're working on that but for now is AS2-only.
If you're dead set on building your own photo album from scratch, take a look at this
photo album tutorial from Kirupa.com. It's a little old, but it is thorough and should give you a good handle on loading images dynamically via an XML file.
Good luck!
--eric