You can upload to the album that you want the images in by FTP uploading them to that folder, then run a "reindex" from the admin.php and this will generate the thumbnails.

You don't need a separate FTP login or anything.

It could possibly be down to owner permissions. Try deleting the album folder if you created it from within the admin script, then create a new folder using FTP and upload the photos into that.

This is because some servers are setup so that the "owner" of a folder created using PHP will be set to "Apache" and folders created using FTP will be called your username and it may not let you upload anything if you are not the owner.