It's actually fungus rather than algae, but otherwise harmless. As minxfishy says, some fish and snails will happily eat the stuff. On the other hand, if there's a lot of it in your aquarium, that does imply quite a bit of decay is going on, and that in turn means oxygen is being consumed. So while the odd bit of fungus isn't anything to worry about, don't go bananas and put tonnes of green (or fresh) wood in the aquarium.
Cheers, Neale