This code in the gallery.php file is wrong:
<?php $temp_query = $wp_query; ?>
<?php query_posts('category_name=' . get_option('gallery-category') . '&showposts=' . get_option('gallery-items')); ?>
...
<?php endif; ?>
<?php $wp_query = $temp_query; ?>
The idea of saving the existing query off to a temp query and then resetting it afterwards is a good one, however the implementation is wrong, and also this is unnecessary.
The problem with the implementation is that you forgot to declare $wp_query as a global. So if you're being included from inside a function scope, then this won't save the query and won't restore it.
The main problem though is that WordPress has a built in function to do this for you, which always works everywhere. wp_reset_query() can be called to reset the query to the default, no matter how much you mess with it.
Change your code to this:
<?php query_posts('category_name=' . get_option('gallery-category') . '&showposts=' . get_option('gallery-items')); ?>
...
<?php endif; ?>
<?php wp_reset_query(); ?>
Notice how I eliminated the use of $temp_query entirely? WordPress makes a safe hidden copy of the original $wp_query, so even if you later call query_posts and change the query, calling wp_reset_query can always restore it back to normal, and it doesn't matter what scope you're in anymore either.
http://wordpress.org/extend/plugins/featured-content-gallery/