We are aware of an issue during save to 'Photo Library' affecting users that denied 'location services' to recently updated apps. The brief error message that is displayed is harmless and the save completes. We have submitted an update to address the issue. Location services are required to create and access the albums individually. Enabling location services allows album management and prevents the error.
You can delete any item in the "Recent Edits" list by swiping across the item to reveal a delete button. This same gesture is used in the Mail app to delete a message. The recent list only keeps the last 20 edit sessions.
All apps will function in a diminished capacity with location service disabled. To display photo info like shutter speed and ISO, open images at high resolution that were imported via the Camera Connection Kit and to allow you to save to different photo Albums, our apps need to use Apple's lower level photo API. Since your photos may have location information in them about where they were shot we must prompt for access to location services. For those who deny access the appropriate features are disabled.
We have already submitted a fix for this issue, and expect it will be approved next week. For the moment you can work around the problem by unrotating and exiting the rotate room. Then rotate your phone 90 degrees and re enter the rotate room. You should be able to proceed.