When you set up your iPad you did this through iTunes on a computer or laptop. Plug the ipad into the same computer and launch iTunes. Click on the name of the iPad in the left column. Click on "Photos" in the central window (above where it shows remaining memory etc). Select a directory folder on your computer that you would like to synchronise the photos from. You may want to create a new folder for this purpose. Once this is set up all you need to do is put photos in this directory and every time your iPad synchs it will add new photos.
To create albums create other folders within this folder and put photos inside those. The names of these folders will be used as the name for the album on the iPad, which will automatically have those photos loaded into it. This all sounds easy but there are two catches:
1. The directory you created must have no photos in it at this top level. They must all be in directories below that one. If you have any photos inside the main directory folder then all your photos will just appear as one big album.
2. Sometimes the iPad will not copy new photos over and says to check they are the correct format even if they are all; jpegs. To fix this go to the directory on your computer and delete the iPad photo cache files from it. This will force a complete reload of all the photos, not just the ones you added. be careful to check that the synch settings for photos is still set to your specially created folder as sometimes deleting the cache files on the Windows version of iTunes forces your entire myphotos directory to be copied onto the ipad (not great). [update June 2012 - since the last iOS upgrade I have not experienced this problem so it seems to be fixed].
Once you have synchronised the iPad you should find that the photos app has the "album" button active and you can browse your albums. There will also be another album called "photo roll" which contains any photographs you have taken using the internal camera.
Update June 2012
Since the last upgrade to iOS 5.01 and greater integration with iCloud it has been possible to copy photos between albums on the iPad itself.
- Select an image so it displays on the screen.
- Touch it and the menu bar will come up.
- Click on the box with the arrow coming out of it on the right hand side.
- Select "copy" and it will be copied. (you can actually copy and paste by touching on an image in album view also).
- Go to another album and click paste.
- It will now appear in that album also.
However, you can't then delete the original version or it deletes it from the copied location too! For this reason I still think that iTunes is the best way to work with photo albums on the iPad.