An album is an album (for the sake of argument, a disc containing more tracks than there are on a single). Got the name because they were originlly book-like folders containing a number of 78 rpm singles. In that sense, a hits collection is as much an album as, say, Sgt. Pepper.
However, since the days of long-players, when somebody says they're cutting an album, they mean something more specific than a bunch of singles thrown together. Early country and r&b albums, for instance, were a bunch of songs recorded for (and often released as) singles; plus maybe some filler -- stuff that was recorded, but would never be seriously considered for released a single. (The filler was especially obvious on Phil Spector-produced albums -- he'd cut a couple of songs for the Righteous Bros. or Tina Turner, say, and, and often let somebody else produce the rest. Ike Turner puled crap in claiming it to be newly-recorded material, but that's questionable -- he was in the studio all the time. And of course Bill Medley started getting hits with his faux-Spector productions.
But when you say you're going to by somebody's album, does anybody really care about such distinctions?