Just had a bit more of a look at this. To do something like the second of your requests, you'd need a .htaccess inside the "album" directory containing something like this (it might not be totally correct but it works ;)).
RewriteRule ^([^/]+)/([^/]+)/?$ index.php?pp-album=$1&pp_cat=$2
This would redirect anything in the form of http://www.yourdomain.tld/album/ducks/geese/ to /album/index.php?pp-album=ducks&pp_cat=geese.
Note that the [^/] (read: anything but a /) are there as it will match them otherwise - and you probably want /album/ducks/geese/ganders/ to give an error rather than try and redirect to pp-album=ducks/geese&pp_cat=ganders.
You are going to have to know bits of regex to do this, but it's not *that* tricky.
So, to do the "picture.jpg" you would want a RewriteRule like:
RewriteRule ^([^/]+)/([^/]+\.jpg)$ index.php?pp-album=$1&picture=$2 [L]
this as the first rule. (the [L] stops the next rule being processed (which would mess things up a tad if it was processed))
Obviously you want different types of filenames and so it's probably better to forward anything with a "." in last part of the path to the album script as an image (rather than a category):
RewriteRule ^([^/]+)/([^/]+\.[^/]+)$ index.php?pp-album=$1&picture=$2 [L]
You can probably work out the album bit too.
None of this is particularly beautiful (nor is it totally correct) -- I tend to just hack around with stuff like that until it works. It might be a start for you to have a go exploring what you can do, however.