For each gallery, you have an option of numerous different formats, or layouts, to choose from.
The main reason to alter a gallery's format is to change its functionality. For instance if you have a gallery that has sub-galleries underneath it, you'll want to change that gallery's format to a "Sub Galleries" type of format. Then, instead of showing photo thumbnails, the gallery will show sub-gallery thumbnails instead.
Another reason to alter a gallery's format is to simply change the layout of how it displays photos. For instance, instead of showing the photo thumbnails, you can choose to show all the full-sized photos on one long page.
Here are some examples of some of the gallery formats: (Note that some formats may have a different appearance on your site, but the general idea is the same.)
"Photo Gallery" format:
This is the most common format, which simply shows an individual gallery's photo thumbnails. The thumbnails link to the photo pages.
"Sub Galleries" format:
This is the other most common format, which is used to show a menu of sub-galleries that are organized underneath this gallery. The thumbnails link to the galleries they represent.
"Sub Galleries" formats are used for organizational/navigational purpose, to display the sub-galleries. Therefore, these galleries do not actually contain any photos, and you shouldn't be uploading photos directly to these galleries.
"Sub Galleries - Journal" format:
This works just the same as a regular "Sub Galleries" format, except it has a different layout and displays a snippet from each sub-gallery's paragraph.
"Photo Gallery - Large Photos" format:
Similar to a regular "Photo Gallery" except that instead of displaying the photo thumbnails, it displays all the large photos on one page. This format is useful for trip reports or galleries with a small number of photos, for example.
"Multiple Sub Galleries showing their Photos" format:
This format can be used in lieu of the normal "Sub Galleries" format. What it does is instead of showing the thumbnail links to various sub-galleries, it will show each sub-gallery's photo thumbnails, one sub-gallery after another. Think of it like having multiple "Photo Gallery" galleries stacked up on one page.
"Multiple Sub Galleries showing their Sub Galleries" format:
This format is seldom used, for scenarios where you have three levels of sub-galleries. It lists multiple sub-galleries, and for each sub-galleries it shows the thumbnail links to further sub-galleries under that.
The variety of gallery formats will accommodate any gallery structure, enabling you to display your sub-galleries and images however you'd like. Do not be intimidated by the variety of format options. After you have set up your galleries and uploaded your photos, I encourage you to test out the different formats to see how it affects your site. Don't worry, you can always change them back.