I have a part of my site called 'Archive', which is a page that displays the subalbums of an 'Archive' album. This is my loop:

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Why don't you just use the normal album page for that? Then you don't need to worry about pagination as that all is already there.

If you need different layouts for certain albums look at the multiple_layouts plugin.

Good point. Could have saved myself some time there...

But can you override the number of subalbums to display per page?

You can override most options and so also the album per page one using:
http://www.zenphoto.org/documentation/functions/_functions-basic.php.html#functionsetOption
Look at the database about the actual option name or with the (normally now deleted) setup scripts' setup-option-defaults.php