The Albino budgie (and the Lutino too) are created by the Ino gene, so are sometimes called Inos. The Ino gene removes all the melanin (the substance that creates all the dark colors in the feathers, skin and eyes). So a blue series budgie becomes white and all the green series ones become yellow. Albino is the term for a white (blue series) Inos, Lutino is the term for a yellow (green series) Ino.
The Ino gene removes the dark shade from the skin and beak leaving the bird with pink legs and an orange beak. It removes the blue shade from the cocks cere too so they have a flesh/skin colored cere whilst the hen is the usual rough brown shade as this is not caused by melanin. The dark color of the eye is also gone leaving a red eye with a white iris ring (sometimes no iris ring is present), and the cheek patches are silvery white.
The hen on the left shows the red eyes and orange beak that help identify an Ino. You can also see the cere of a hen, brown, rough and bulging outward a bit.
On the right is an Ino, and below it a Double Factor Spangle, you can see that the Spangle's eye, beak, cere and legs are darker than the albinos.
Because usually only the white and yellow colors are left an Ino can
hide the fact that it also has other varieties present. This is referred
to as masking, so an Ino may be masking Spangle, or Dominant Pied
etc. You would not be able to see these varieties but they are present
in the genes. The only varieties that show are the Yellow Faces or Golden Faces on an Albino budgie, as seen below. Again this is because the yellow colour is not caused melanin.
The only exception to the above rule is the Lacewing budgie. In their case the Cinnamon and Ino genes are present on the same chromosome and for some reason light brown markings and pale violet cheek patches are visible. This makes a lovely white or yellow bird with pale brown markings! The Lacewing is often spoken of as if it was a variety, but it is actually a composite (the same as a Spangle Opaline, or Cinnamon Recessive Pied for example) as it is made up of Ino and Cinnamon.
The other interesting thing that can happen is that sometimes a faint
'suffusion' of the body color can show in certain lights. The Ino budgie
above on the right has a tiny bit of blue suffusion showing by its wing and
under its tail. This is not an actual patch of blue body colour.
There is a variety called the Texas Clearbody. This variety arose from a mutation to the Ino gene and so is related to Inos genetically.
The Ino gene is sex-linked and recesssive. Check out the Budgie Genetics
page if that doesn't make sense...
This means the basic inheritance works like this:
Ino x Ino = 100% Ino chicks
Ino cock x Normal hen =
-50% Normal/Ino cocks
-50% Ino hens
Normal cock x Ino hen =
-50% Normal/Ino cocks
-50% Normal hens
Normal/Ino cock x Normal hen =
-25% Normal cocks
-25% Normal/Ino cocks
-25% Ino hens
-25% Normal hens