I'd be interested in working with you more on this. Shoot me an email if you'd like to hear more.
On the site:
On the hosting plans page, you have a long list of features starting with "Auto-organize photos by date" that all of the plans have. There's no need to have 5 columns of all "YES". Just break it out into a subsection below saying "All plans include these great features:"
Also, your design is really great but your text is really...programmery. Make it bigger, make it prettier, make the copy a little friendlier. For instance, "Send attachment-free email updates" could be "All OurDoings emails include picture thumbnails so you don't have to go back to the website" or something. There is big benefit for wordsmithing to match your audience's language. A/B testing will work better than your suspicion.
The navigation is inconsistent and confusing. The only consistent link I saw across all pages was the logo that takes you back to the home page. I'd recommend the following (links, tabs, sidebar, whatever): Home, "Create a new album" (if not signed in) or "Album home" (if signed in), and "Help".
I agree the with m_fish, the pricing is confusing. It looks like $1/500MB for one week, or $0.10/MB/year. This doesn't mean a thing to normal people. Also, the Max price is a nice idea (reassurance against overcharging) but it makes the otherwise identical plans confusing.
Clicking on "Buy" takes you directly to a PayPal login screen - that's horrifying! Hold my hand, please, I don't even understand what's going on here. (that wasn't sarcastic)
Also, the ad supported free account is a good idea, but it's not clear where the ads will be or what they're for. That's a little creepy in context with my kids. Will I be spamming my kids' aunts with your site?
As far as the ads, where are you getting them? Are you putting them in emails? Do you think they would pay well enough to have your service associated with ads?
Your creation pipeline is a little hairy too. The only place to find it is with the Free plan link, then you get a generic login screen that doesn't reassure me that I'm making a photo album and doesn't even tell me I'm creating an account. I don't know what happens after that but I'm too scared to go somewhere so poorly marked.
I'd make a free trial the default, then let people offer to let people upgrade if they want more pictures/fewer ads. 37signals apps like Backpack do a good job of this.
As for getting traffic to the site:
Include a blurb at the bottom of every notification email along the lines of "Like what you see? Wish you could share your pictures like this? Create a trial album at OurDoings.com" and create a landing page where you can track referral sources.
Try to get in the new parents guides that hospitals, parenting magazines, Babies 'R' us, local kid attractions, etc send out. Include a coupon with referral number so you can track effectiveness.
Are you even getting traffic? Is a really leaky funnel that's keeping you from getting paid accounts or just a low flow of potential users?
Make it easy for users to spread the word. Give them credit (affiliate style) for getting new accounts.
Have a contest for the best picture per (week/month/etc).
pg says that making something great sells an app, but he also hired an expensive PR firm and said they were worth the money. I wouldn't hire a firm, but I would put effort into marketing.
Lest you think I'm trashing you, here's the good:
Your site is pretty. That's reassuring and will keep people on your site long enough to give you a chance once you get there.
Once you're actually in an album, the navigation is pretty good.
I think your approach to photo sharing is dynamite - you're clearly not getting into a fight with Flickr that you would lose, and it's such an obvious upgrade over "nothing" which is usually what people are doing with their pics right now.