Each photo has a privacy level (a lock). Each user also has a privacy level (a key). There are 5 privacy levels:
Higher levels have permissions on lower levels. For a given user, the higher the privacy level, the more photos he can see.
For example, if photo "peter_wedding-0024.jpg" has "Family" privacy level, then:
A user that has no permission to see the content of a album won't see the album itself, not even its title. The same principle applies to a tag.
You can set the privacy level of a user on Administration » Users » Manage screen.
If privacy levels do not fit your needs, you can also manage permissions on albums for a user or a group. You can manage permissions on photos and albums at the same time, without conflict.
You can forbid access to albums. Switch the album access type to
"private" if you want to manage permissions.
You can set a album to private by editing a single album
(Administration » Albums » Manage
» edit) or by setting options to your whole album tree
(Administration » Albums »
Properties » Public / Private).
Once the album is private, you can manage permissions for groups and
users with 3 screens: