How do i make a new album in the HTC Photos application?

I have an HTC Hero (with the Android 2.1 update). For the longest time, I've wanted to create new albums in the Photos application and can't for the life of me figure out how to do it. It has a bunch of default albums like "My Favroties" "All photos" and such. I just want to create my own albums so I can organize some pictures, like an album of all the pictures of my ridiculously cute niece. Anyone know how to do that? Or can suggest a better photo management application for Android 2.1?