Whenever the system failed to make a thumbnail, the 'entry' is invalid (there must be 3 things: a sql tabe entry, a full image and a thumbnail image). This is fixed automaticly. For debug purposes it would be handy to switch that off temporary, this will be possible in the next rev (4.2.2). So that is ok.
If this problem (Error: imagejpeg failed in class-resize) happens always, your php config may be insufficient.
If this problem happens somtimes, your server memory may be too low.
Please check Table IX item 5 in the Photo Albums -> Settings screen, and supply a link to the site, i might be able to see what is going wrong.