It is a common misconception that Starter Edition 'stores', or copies, your files into it. But the program does not move or copy files at all, rather it scans your system's My Pictures directory, and generates miniature versions of your pictures (called thumbnails) so that you can browse a 'flat' list of thumbnails of your photos, overcoming the inconvenience of having to go into separate folders in Windows Explorer to have to find files.The thumbnails, as well as any tags, and Albums that you create in Starter Edition are all stored in the Photoshop Album catalog file, separate from your pictures, and your pictures remain where you originally copied them to your computer.
If you use Photoshop Album to subsequently download files from a digital camera or cell phone, the default location where the program will create those files would be in the My Pictures>Digital Camera Photos folder. But if you do NOT use Photoshop Album Starter edition to download files from your camera, then you will find that folder empty.
The thumbnails in the Starter Edition catalog will exist, even if you decide to move or delete the original photos that were added to the program. This will cause files in the Photoshop Album catalog to become 'disconnected' from the original photos. To reconnect the files, you can use the File>Reconnect Missing files command to see if the program can locate the original files in a new location, and once again re-link the catalog thumbnails to the files they once referenced.
Since Photoshop Album has been discontinued, I recommend that folks find an alternative solution. One alternative that will preserve most of what you've created in Starter Edition is the Photoshop Elements 8 trial. Install that, and it will automatically convert the Photoshop Album catalog to a current format, and the program will not time out, as Starter Edition did. If you want to purchase more Editing power, you can also choose to purchase the full program, but it's not required.
If you are like many who have come to this forum wondering how you can get to your photos, now that the program has become locked or expired, don't worry; your photos have never been moved by Photoshop Album; they remain wherever you intially put them, on your hard drive. To get to them, you can navigate your file system using Windows Explorer. They are typically in your My Documents>My Pictures folder. Here is a handy How-To that you could refer to to find photos on your system, as well as some other tips for how you can use folders to keep your photos organized: http://www.microsoft.com/windowsxp/using/setup/maintain/filemgmt.mspx
Hope those tips help!