I just got done doing the exact same thing on my gallery website. I wrote a few php pages to manage images that were FTP'd up to the server. Basically, the script checks for any changes in the file listing in it's directory, then if there are changes (picture added, picture deleted) it will generate the appropriate thumbnails (using Imagemagick's convert) and screen-sized images, and write out the whole deal to an XML file that keeps track of the directory.

I'm going the extra step of only generating (and then caching) the thumbnails when the user views them. I'm also giving the user the choice of different sized thumbnails for those poor modem users.

I am also writing out an XML file to hold info on the photos. My album software is being writen in .Net