When I went to Albufeira, all I had heard from locals and also foreigners in there, is that you can find free wireless in the Library (close by to Albufeira Shopping Center) and MacDonalds. Well, that might be true, but the free wireless situation is actually a lot better than that. Note though that often you'll need to ask for the wireless password from the bartender. This of course, includes buying a beer or two as well (if you're a pussy, go with a coffee instead).
Usually it doesn't make sense to ask anyone if they know where the closest free wireless spot is - mostly they don't know. Just try a few places and I'm sure you'll find one. Just to give you couple of names to get you started. There's a bar called Beer Spot in Albufeira old town, about 50 meters away from the Main Square there. There's Lick It on the Main Strip, facing the Matt's bar on the other side of the strip. There's Rockline (find it yourself, hard to explain, but easy to find). There's also free wireless in the lobby of the hotel Solidoro near the Main Strip. These are just a few wireless internet spots I mainly used when I needed to get some work done.