How do I add an iPhoto album??

I have recently moved over from PC to Mac so will try to explain this as best as I can in Apple terms...
I am trying to create new albums in iPhoto to drop my photos in (on the desktop that shows a picture from each album). ie. '2012' so that my photos from this year can simply sit in this years album.
However when I create a new album, nothing appears on my iPhoto desktop. A new entry called 'untitled album' appears in the left hand side bar but I am unable to drag this onto the desktop. Also, for some reason this 'untitled album' self populates with photos (I dont want in it) that are already on the desktop.
How am I able to create an empty album in iPhoto? Do I need to create it in Finder first? Does the Mac not allow empty albums? Any help would be appreciated before I have to trundle down to the Apple shop at the mall and look stupid infront of real people...thanks.

You seem to be confusing Albums in iPhoto with Folders in the Finder. They are not at all the same thing. There is no correlation between what goes on in iPhoto and the Finder.
If by "desktop" you mean the  iPhoto Window - do you? - then you seem to be confusing Events (on the desktop that shows a picture from each album) and Albums.
You are creating Empty Albums:
However when I create a new album, nothing appears on my iPhoto desktop. A new entry called 'untitled album' appears in the left hand side bar
Albums don't show in the same view as Events.
Events are organisation for those who can't really be bothered. They are automatic - based entirely on Date and Time the camera records the photos as taken.
You can move photos between Events, you can Merge Events, you can Rename them and sort them in various ways except one: You cannot manually sort in an Event as Events are all automated.
Events also hold the actual photos. If a photo is in two Events then it uses twice the disk space.
Albums are much more flexible than Events - Smart Albums even more so. You can decide what goes into them, you can have them populate automatically - for instance:
File -> New Smart Album
Date -> Is After -> 31/12/2011
will get all the 2012 photos in your Library. Even better, as you add photos they will be automatically added to the Smart Album.
Albums simply reference the the shots in the Library, so a photo can be in 100s of Albums and use no extra disk space.
To create an empty album:  Shift-Command-N
Albums do not display in the  iPhoto Window as Events do.
Regards
TD

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