My apologies for getting to the party a bit late... I can imagine how frustrated you must feel, so let me see if I can help you as well.
It is quite a while back since I looked at this, so my memory is a bit rusty as to what I did, but I'm pretty sure I didn't change anything in functions.php, as I was specifically try to avoid making any changes to core files.
So let's run through the steps you need to do once you have pretty photo installed:
2) Add the following code to the field "Link Code line" in the Effects tab:
3) Call the gallery with the shortcode [nggallery id=3] where id is the ID of your photo gallery.
I think your problem might lie with the shortcode you are using, so try the above shortcode and let me know if it works. Don't make any changes to functions.php just yet.