I am developing a website for a local group and want to include photo album. My idea is that users could create albums and if they belong to the same group, they can upload photos to the album.

But I want to make it quite efficient and quick loading. If anyone of you have used websites like interpals.net or even facebook, you see how we click from picture to picture. When and how are the thumb nails created? Where are the images stored?

Could you please give me an over all introduction as to how photo albums should be developed. A link to an external tutoral would be appreciated as well.

There are a lot of photo albums out there already that are probably fancier than anything you would develop yourself. Coppermine is one. Coppermine creates thumbnails automatically when pictures are uploaded.

There are a bunch of JQuery photo albums as well. Suggest that you take a look at what is available before you do any development.

here is a quick hack for what i did in my first album ( not the best way to do it though )
you can create a table in your database obviously stores the id of all users...
whenever a user uploads an image...you store it in the images folder...and rename the file according to a standard....you save the filename onto the database along with the userid of the person who uploaded the image ... this way you can cross check as to who uploaded which image to personalise it
2.) another way could be by designating every a folder of his own and storing his images there...you can use the basic dir commands to do this ... but some web servers might not allow this

as far as the image gallery is concerned...if you dont have much experince with javascript or jquery ..then i suggest you use some image gallery already available freely over the net ...