I did a test with a 1536x2048 PNG (iPod 3 screenshot) that I uploaded via Add Photo/Video feature next to Update status.
The photo shows in an album as a 720x960 JPG. These dimensions are the "natural" ones of the image at the akamaihd.net URL (I checked using right-click on the image, "inspect element" of the Developer Tools in Chrome browser).
This test seems to support your conclusion that 960 is the max dimension for viewing high-res images in an album.
When I download the image from Facebook (Options -> Download) I get the original dimensions; however, JPEG compression is applied.
Regarding official max resolutions supported by Facebook, Google found me this blog entry and this one, too. The latter, which has updates from 2010 and 2011, mentions in its 2010 portion:
We're increasing the size of the photos stored from 720 pixels to 2048 pixels on the largest edge...
That blog provide some hi-res photos uploaded by National Geographic. Some of them go beyond your 960 limit, e.g., this one at 1600x1200. I'm not sure how they show at higher res in the album.
Edit Note: The direct link I gave doesn't actually show the image with the high-resolution. You have to navigate to it in the album, with a screen big enough to support the resolution I think. Chrome seems to load a lower-res version if the screen size is smaller.
I re-tried my uploads using the "high quality" option in an album (see the FAQ). Edit The N.G. image I uploaded did maintain 1600x1200 resolution, and the iPad 3 screenshot (which I rotated to change it in case of cacheing) came in at 2048x1536.