I guess so. Still hoping for a (fast) solution and trying to dig deep.
What I found out now is that If I change following option:
Gallery Settings/NextGEN Basic Thumbnails/Template
(comment says "Use a legacy template when rendering (not recommended)."
Default value: empty
New value: "NextGEN: gallery.php"
all the umlauts are back, but the gallery is a bit messed up and as soon as I use the pagination to move to page 2 (e.g.) i get following error message:
"Default Gallery Type Template
This is the default gallery type template, located in:
If you're seeing this, it's because the gallery type you selected has not provided a template of it's own. "