How would you go about setting permissions for the albums?
 

I asked on vb.com and they said there is no option to limit viewing pictures in albums to registered members only. Trying to save bandwidth, I want to prevent unregistered people from viewing pictures even if they know the direct link. Is something like this possible? thanks

I'm not sure why vb.com would say you can't limit viewing of albums. If you have Profile Privacy turned on, the the user has the option in the User CP > Profile Privacy to set it so only Registered Users may see the albums (or only Friends, if they wish).

If you have album images stored in the file system and you put the directory for the albums where they suggest - not in the public_html folder - then unregistered users may not access them even if they have a direct link. If you do put them in the public_html folder, then you can use htaccess to not allow direct access.