On follow-up of this plugin, I can see that the "Dynamic Content Gallery" also uses moo tools, just like "Featured Content Gallery" so I'm not really sure where the issue could be?
The only thing I can imagine is a conflict from some other plugin somewhere? (Which I've seen mentioned several times on various websites).
On a side note, I also found out that you cannot use a category named "Featured" for this. It seems "Featured" is being picked up by WP and used. After I removed this plugin, that large featured blurb was still there.
Instead, make some other category name to use and configure "Featured Content Gallery" to use that category instead.
Finally, to hide that category from displaying in your navigation, use code that looks like this:
<?php wp_list_categories('exclude=1,4,12,7,8,10,653&title_li='); ?>
Where the numbers are the ID's of the categories you do not wish displayed in the WP navigation.
I'm going to have to disable all plugins, try "Featured Content Gallery" (FCG) again and then see if a plugin breaks FCG, and which one.
Personally, it is a bit of a pain in the behind to do.