I just downloaded and installed the app, but the thumbnails are not showing up. I've tested in both IE7 and Firefox with no avail. I've got version v09b65. It's running on an IIS server (see PHP test link below). I'm new to PHP, so maybe I'm missing something here.
I have changed the permissions on both /galleries and /cache to 777. /config/settings.php has default values.
Test PHP: http://edtweb17dev223.edthosting.com/test.php