NOTE: Be careful, if there is a folder you do not want Album to see and generate a thumbnail cache of, you must not open Album before doing these steps.
1. Go to the Market and download AndExplorer, open it and find the folder you want to hide
2. Long-touch on the folder you want to hide - a green tick should appear beside it
3. Press the Menu/Options button at the bottom of the phone (left button below screen)
4. Touch Rename
5. Add a dot to the beginning of the folder name, e.g. if there is a folder called NewFolder rename it to: .NewFolder
Done. Android treats folders starting with a dot as hidden folders, the Album app will not scan the contents of such folders.
By the way, AndExplorer is my personal choice for a file manager app – there are other good ones available too, Astro for example.