1. First off did you upload the file to your plugin folder? Not the module folder? Sorry if this may seem a stupid question - but it isn't, I've done this myself before now!
2. Which version of CMS Made Simple are you using?
3. Apart from the above, I can't see any reason why the module would cause an error in admin, since it is really not used there. (Check there is only one file with the function.ImageGallery in your plugin folder and that none like this are in your modules folder.)
4. If this is coming from a page you are trying to display with the tag....
Does the directory exist?
Do you have the backslash on the end of "upload/images/yourfolder/" ?
As for Albums , i'm not sure what you mean. You use different pages with different galleries and perhaps a 'links' page to act as an index and point to them? Upload the images to different directories? This might be what you want. Or you can have multiple galleries on one page - maybe a bit much though. Either way you can format them all the same or indeed differently.
Hope this helps, if not let me know, I'll be on line later today

Russ