Here's the fix and a linkto a M2D FAQ. I used the regedit fix myself
Q. How do I to change the defualt Photo Album so it will display my pictures & videos stored on my memory card?
A. Navigate to the Photos and Videos tab in Manilla, press the left softkey "Album", press the left softkey again "Albums", press Storage Card, navigate/select where your pictures and videos are stored, press right softkey "Menu", select "Set Album as Favorite"... Done!
A. Reg Key Edit: HKEY_LOCAL_MACHINE\Software\HTC\HTCAlbum\ change favorite_folder from [CAMERA] to what ever location you want.
http://forum.xda-developers.com/show...postcount=2741