Ah, the information I needed is on the developer's blog, in the comments:
"Paul" on a Jan 6 comment said:
WP 2.7 working…
I was able to get the plugin to work in WP 2.7 by deleting the wppt_* options directly from the database. That is to say:
1.) Use something like “phpmyadmin” to connect directly to your database server.
2.) Navigate to the database for your installation and find the “options” table.
3.) That table has a hundred or so entries. You can just “Browse” through the table for the 2 or 3 that begin with “wppt_”[something]. Or (if you have thousands of entries) you could do a Search and put in “option_name like ‘wppt_%’” as your search criteria.
4.) Delete those options that begin with “wppt_”.
After I did this, the next time I tried to upload an image with wppt it worked just fine.
[I noticed that even after disabling the plugin and re-enabling it, my wppt options in the database were still those from an earlier installation. My suspicion was that maybe WP changed the way it stores array data in going from WP 2.6 to 2.7? And that disabling the WPPT plugin apparently doesn't erase the option arrays stored in the database? I don't know... but this worked for me :->]