Perfect answer Nick, including screenshot. The only thing I would like to add is that you carefully go through all these selection screens for the profile, especially if you have extra profiles and you require not only maximum photo's allowed, but other settings such as total photo's allowed, if your site consists of a few users that will be doing a lot of uploading, then album numbers etc have to be looked at as well.
My suggestion would be to leave registered users as default setup and create your own profiles based off that where you change the settings to suit each profile type.
Cheers
Jeff