OK... I really don't know what to say to you. Do you work for Apple? I was led to believe that I was buying an iPad 2. That's "iPad", with an "a". It's not an "iPod", with an "o", or an "iPhone" either. It's model number in the "General" section of the "Settings" is MC979LL, and my "Version" is "5.1.1 (9B206) It says on the back of the case "Model A1395". It was a major worldwide corporation that sold it to me, so I don't think they would have sold me something that I didn't think I was buying. Could you please tell me whether I have an iPad 2?
I'm giving you all this information, because I don't have on my iPad the choices that you've said I'm supposed to see. You say, " there should be four options (SAVED PHOTOS, PHOTO STREAM, ALBUMS, PLACES)" I have "Photos, Albums, Events". When I tap "Albums", then "Edit", it darkens all but one of my 4 albums, and gives me 2 choices, "New Album", or "Done". Neither of these choices is suitable for what I'd like to do. There are no "x"s for me to tap. If I tap the darkened albums, nothing happens. If I tap the lightened album it opens up, but just lets me look at the photos I tap.
I like to keep things organized. The iPad is not a good device for this. I need to be able to remove things from a device just as easily as I put it on there. Please pass this on to Apple support.