There are two mechanisms to remove pictures from albums and groups.
In order to remove picture(s) from an album or group by viewing the album/group, you must:
If the picture only belongs to the selected group or does not belong to any groups in the album, it will be removed from the album. If the picture belongs to multiple groups, FotoAlbum will prompt you for specific actions (e.g. "Remove from all groups", "Remove from current group").
Since a picture can belong to multiple groups in the same album, it is important to have the correct group selected when you press the DELETE key.
Under no circumstances does the DELETE key actually delete your picture file. It merely removes it from an album or group. The picture will continue to display in the All View. If you want to delete the file from your system, use the Delete Picture (CTRL-DELETE) option.
(Warning: If this is your only copy of the picture, you will probably want to move your pictures outside your picture folder as opposed to deleting them).