I had originally wanted to do that too. I did what acrylian suggested - albums with dynamic albums standing in for subalbums. I placed the dynamic albums inside of real albums that don't contain any images.
I wanted:
Insects
--Bugs
----Assassin and Ambush Bugs (images contained in this folder)
I used:
Insects
-- Bugs (album - all images contained in this folder)
----View By Family (album - no images in this folder, only dynamic albums)
If you'd like to see how it works, it's at http://donnabrunet.com/images/stock/