I went to undergraduate in Albany for four years, and can also second that finding an apartment will not be difficult at all, especially since you're all looking during prime student time. I'd just echo a few earlier suggestions, not to live in the "student ghetto" areas, which are downtown areas around streets like Hudson Ave/Quail/Lake along Western and Washington Aves. Try to get an apartment further downtown, towards the state government offices. Also some things to look for when choosing apartments in Albany: how close are they to the bars? (strong emphasis on this in Albany) parking availability? (some streets are very restrictive on parking, but this usually is just a hassle rather than a deal breaker in Albany) also, try to introduce yourself to potential neighbors. Albany is misleading because a lot of frat houses and undergraduate students live in houses, rather than individual apartment buildings, so it may appear as a residential neighborhood during the day but actually be an area overrun by undergrads.
These are just a few general ideas. I know there are quite a few people on the boards who are familiar with the area, so feel free to ask people for advice on areas you're considering. I know if I was stuck in the area I lived in as an undergrad, while trying to study for law school finals, I would have gone crazy.