I've discovered the problem. I'm not sure if this problem is already known or I'm just inexperienced. I would like to pass this knowledge to other users:
When using album.pl with IIS, if I enable "anonymous access", IIS dosen't allow .exe files to be executed. Since the "convert" binary of image magick is an .exe file, it dosen't work. Other perl scripts do not use the "convert" binary therefore they are not affected.
I ran into this problem because I enabled anonymous access after I enabled flat file authentication.
I would like to keep using flat file authentication (and enable "anonymous access"). If anyone can tell me how to make image magick work with "anonymous access" enabled it'll be great.