Yes, you can choose to share the whole drive, or a single folder, or a single file. The pogoplug works great for this purpose. Just simple choose the folder and click share and input your family members email and they will receive an email with a link to view the pictures. You can also authorize them to upload to the same folder and make changes to it.

Not sure why, but I did this and it worked perfectly ... the first time I created a "family" folder to share. I created another folder at the same level and gave my Sister full-access, and she is yet to be able to upload via the web browser interface.
Any suggestions? Maybe I have to wait a few hours? or some time for the settings to take effect?

Okay, that's good to know on the "timing". What was not working (IE7) was the upload function. She was able to add and select a file to upload, but it would not complete the task. I'll have her turn pop-up blocker OFF and see if that does it and report back. Thanks!
PS: I setup my wife's laptop to do the same thing and it works instantly. So, it COULD be something local to my Sister's computer.

Follow-up: My sister can access the new folder I created but still can't upload to it. I plan to connect to her desktop and see for myself this week.