I have similar problem with my NextGen gallery.
Thumbnails aren’t created. I get massagge:
“You do not have the correct permission”
All gallery folders have 777 premitions
* Operating System : Linux
* Server : Apache/2.2.8 (Linux/SUSE)
* Memory usage : 9.55MBajt
* MySQL Version : 5.0.26
* SQL Mode : Not set
* PHP Version : 5.2.0
* PHP Safe Mode : Off
* PHP Allow URL fopen : On
* PHP Memory Limit : 72M
* PHP Max Upload Size : 32M
* PHP Max Post Size : 32M
* PHP Max Script Execute Time : 30s
* PHP Exif support : yes ( V1.4 )
* PHP IPTC support : yes
* PHP XML support : yes
