You may have some photos that aren't that great and you have decided you don't want them cluttering the photo well in Album but you're not yet ready to delete them forever. There are two ways to handle this situation. You could simply delete them from Album and unless you check the "also delete from hard disk" box, they'll only be removed from your catalog. But there is another way...
If you think you might want to access them from Album at some point, but don't want to see them all the time, you can tag them with Album's special "Hidden" tag. This keeps them in your catalog, but you never see them unless you specifically ask for them.
I use the hidden tag often for pictures that other people have sent me. I want them in my catalog, but they're not my personal photos, so I don't want to see them during everyday browsing of my catalog. By tagging them as "Hidden" I can show them anytime by clicking in the find check box next to the Hidden tag. I would also create a new collection for the other person's pictures. (The Collections feature is available only in Photoshop Album 2.0 and higher.) A collection will always show photos that have been tagged as hidden.
