Although Drupal is a whiz with text, able to sort text and perform feats with Taxonomy, it's a curious beast when it comes to images n photos.
It is possible to create superb, image rich sites with Drupal; but for a non coding type like me, there is scope for befuddlement.

First off, Drupal's default Input Filter doesn't even like images - strips img tags out of html (a thread on drupal.org indicates there are potential security threats with img tags) - so the first time I tried text with an image or two, took me some time to figure why they didn't appear. Answer here: use filter allowing img, maybe adding to Filtered HTML, or maybe using Full HTML or a custom filter.

Even with this, mostly need to add a module or several to help add and manage photos.
For me, these are to fulfil three main needs: photos illustrating articles, photos in albums/galleries, and images to help enliven the site, such as in random image block, and header images. [Note that images on my sites are mostly mine, tho a very few users also add images.] I'm using Drupal 6.
There are quite a few choices available; get overlapping features.

Note that Drupal 7 looks set to be far more image friendly, as I've read that modules such as Image and ImageCache will be in core.

Modules for Adding Photos to Articles in Drupal

Image Module

Checking Drupal site, the Image Module seems an obvious choice for photos n Drupal; looks to be something of an old warhorse in Drupal world, albeit updated warhorse.

But to me it's odd for making uploaded images into nodes - allows Drupal to handle them as nodes, so taxonomy terms and so forth can work, but not so readily placed within articles that I can see. Plus, very importantly, version I've tried just slapped all images into one folder - with a lot of images, this could become horribly unwieldy. I've seen a thread inc patch for this, but wasn't sure if this was for me.

Comes with a small collection of modules, inc Image Gallery. I've read of being able to use this with Views, which seemed attractive; when I tried in Drupal 6, Image didn't appear in Views.

IMCE

IMCE was first developed to help browse through and upload images when using TinyMCE editor; uses since extended, including to work with Fckeditor, which I use it with.

Just scanning info on the module, I probably don't make use of all its features. Even so, I find it very useful; it handles folders (directories) within images, can upload photos, as well as helping choose photos to add to articles. It is, however, perhaps a tad too sophisticated for typical users of my sites, who generally aren't techies, want to post quickly without fussing re learning new stuff.

Image Picker

"Finally a good Drupal image module" is title of page by creator of Image Picker module. Well, that might put a few noses out of joint; but here's a pretty straightforward module, for use as people create content - can upload images, create thumbnails, and place them within the content; can also browse thro images you've already uploaded. So, somewhat akin to IMCE I think, tho perhaps easier for users in a hurry.

Modules for Albums and Galleries in Drupal

Menalto Gallery

I've used Menalto Gallery for some years, initially with Joomla sites, now with Drupal. It's certainly packed with features, with plenty of options for themes etc, among a range of add-ons. It's actually distinct software, so can use standalone, and "embed" in sites built with, say, Drupal. I used to embed in Joomla sites; used the nifty Gallery Module to embed in a Drupal 5 site. As this module didn't work in Drupal 6, I changed to use Gallery as standalone, via links from main site.
I've upgraded to Gallery 3, which has been in pretty lengthy development. Previously, I saw notions re embedding this in Drupal, but perhaps will be for Drupal 7, sometime, eventually...

Now, I rather think advances within Drupal and its modules mean it's becoming possible to build a strong gallery within Drupal itself. (Plenty of people have surely done so.)

Views Gallery

The Views Gatlery module helps create a relatively simple gallery, or set of galleries, that use Views functionality, togetther with ImageCache, and some other modules. As Views is powerful - yet can be baffling - this leads to a host of possibilities; I've found it helps get past the daunting initial stages of setting up a gallery. Then, can use Views in various ways, such as creating slideshows with thumbnails or tiny images (which ImageCache creates), lists of photo keywords or photo titles, blocks with images...

I've covered some of my efforts with expanding on this module's functionality in Views Gallery w modifications.

Album Photos

Album Photos (which I reckon would be better named Photo Albums; seems it also gets called Photos, inc as name of modules folder) is evidently a newcomer amongst the small band of photo gallery/album modules in Drupal.

Seems to me it's already among the best of them. Allows multiple photo uploads, to folders that can include users' names; can dictate how many albums users can create.

Works ok as is, but it's best when also indlude dfgallery, which is a separate open source Flash gallery. This can lead to very nice slideshows, say - especially if press the button for full screen option.

Initial version also supported Piclens (now CoolIris), which can lead to very impressive 3D look to collections of images. Later supporting swf; produces real nice flash galleries.

Node Gallery

Node Gallery looks to be a newcomer; and - as you might have guessed for a Drupal gallery module! - seems to need a fair bit more work. Works with imagecache module, to produce galleries that are nodes, with images that are likewise nodes.
I'm yet to try it.

Bornfree

Bornfree looks nice on demo page; said to be useful for images along with text. Requires Image and Image Attach; I've used and not so keen on Image (partly as not keen on storage: seems images into one folder, while I prefer multiple named folders to help deal with fairly large nos of photos).

Fast Gallery

Fast Gallery promises to help w setting up galleries quickly; can scan folders with images, pull images together to create galleries.

Brilliant Gallery

Brilliant Gallery looks to have many features. Requires typing syntax into nodes, custom blocks (there is a default block).

Modules for Displaying Images in Drupal

Dynamic Display Block

Dynamic Display Block is a module for Drupal 6; uses some javascript codes to create blocks with varying content, which can include images. Looks to me a good choice for random image blocks, inc for headers (currently using for my headers). Newly releaced advanced version looks impressive, inc for use on a site's frontpage - could, say, have nifty block, showing changes images w links to main site sections.

jcarousel Block

jcarousel Block looks promising for also displaying images via javascript, with horizontal and vertical strips of images, which can be changed after tiime intervals or by clicking on arrows - but when I installed earlier version, got error messges at tops of site pages, so deactivated it; I should try again sometime, as newer version available. (Have just retried, only briefly, and didn't persevere till had it working.)

Views Slideshow

Views Slideshow - which adds to Views module - looks to have immense potential; able to give slideshow effects to various types of content, text as well as images.
Using quickly, I've a slideshow with latest comments. Done with a View page I created, to show latest comments (8); after Views Slideshow module installed, I could select Formatting, then choose slideshow, with a few settings. So far, this shows a comment; then fades and another comment appears - currently trying it on front page of site.

As Views Slideshow works with nodes and so forth that can be handled by Views, there are many possibilities: this is noted by the documentation. Kind of a nuisance requiring images to be nodes - since I like to upload images to directories, but strikes me there is potential. I could, say, create a "views slideshow" content type, and then add pages to this - each page maybe with an image, or maybe an image with text, together with some taxonomy terms, say. If careful with sizes - so images, at least, consistently sized during each slideshow, should work well.

Views Rotator

Views Rotator looks, on my quick check, rather like Views Slideshow, but simpler. Tho the project page notes that it's far from complete, for Drupal 6.