If you have Photoshop Album 2.0 (PSA2), do you need to uninstall it before installing Photoshop Elements 3.0 (PSE3), which includes Album functionality as part of the application? (This is on Windows only, BTW) The answer is NO, and, in fact, PSE3 does a nice job of importing/converting/using PSA2's catalog so that you don't lose any of your tags, collections, etc. Also, you don't need to uninstall Photoshop Elements 2.0, but it's not a bad idea (I've seen some interesting behavior with both apps launched).
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