The main problem is that Apple restricts access to the photos from apps. Thus it is not (currently) possible to create albums in the iPad photo store.
This is true, but let's not forget that if you want a certain structure for a collection of photos that you've created outside of the iPad, it's actually very easy to do this. The restriction is that you have to do it through IPhoto. Within iPhoto you can create whatever structure you want, and then you can sync only what you want to your iPad. I do this myself for my photos and it works pretty well. In my case, I actually keep a completely different raid array for my iPhoto library, where it's role is two fold: it serves as a JPEG backup of the photos that span a number of drives containing RAW files that I process in Lightroom, and it of course serves as a point where I can sync photos to my various Apple devices - Apple TV, iPod Touch, IPhone, iPad. It sounds like in Ann's case this might work out fine without having to buy any additional software, assuming she already has iPhoto...