This would be the desired way for it to work. I'll have to look into it because otherwise, it could be considered a bug if it doesn't work this way.
If you have Album1 with Picture1 and Picture2 underneath it and you rename the album to Album2, the folder on the server should be renamed Album2. If this doesn't happen and you later create a new album called Album1 and upload a different Picture1 and Picture2 to that album, you would get an error because something already existed with that name.
While the chances of this happening are slim, it still isn't the desired way for it to work.
This is the way it should work, Ryan and zhangweiwu, at least in Plogger3.0 beta and above. It should move the physical folder and files as well as updating the database.