hmm, I would have sworn I used nested albums with gallery - unfortunately, I don't currently have mine up and running to demonstrate that point - I replaced it with a wordpress-integrated gallery.
Having everything run from a CD does make the application server option not as attractive, as all parsing on a CD is done by the browser - it won't invoke an application server like PHP.
sorry for the red herring with gallery - I am just VERY reluctant to get anywhere near hand-maintained sites, as I did it as a career for 5 years - not my favorite thing
so that bias comes through in my recommendations.
j.