I suddenly noticed that my 5-star default album which faithfully appeared in Inspector disappeared. Not sure when or how. Is it part of the many recent updates, or did I do something?
You can still have albums and smart albums together with your projects; new library albums will appear in the "Albums" section, unless you create them after seecting a project. But you can drag all albums to the "Albums" section later.
The advantage of the "Albums" section? If you have many albums and projects, these albums are easier to find and to select, when you are syncing your mobile devices - I put all albums there, that I want to use as a screensaver and to sync to my iPad. In Aperture you can hide this section completely by clicking the "Hide" button.
And what would the first step in locating an album in the new Album section?
You can simply drag any album there; also it will be created there, unless you select a projet while you create an album.
If you do not see the section, hover your mouse below the projects section to reveal the hide/show button.