Same problem here.
I have one wordpress installation (2.9.1) running at the root level of my server, and another running on a subfolder (2.9.1). The one one on the subfolder works great, but I can’t get the one on the root folder to work.
When uploading an image, the image uploads, and in the manage gallery section, I can click on view to see the image. But no thumbnail is generated and in the thumbs folder, there is no file when I look using FTP.
Using nextgen gallery version 1.4.3, and PHP memory limit set to 256M
No errors generated when uploading image. But if I try to “create a thumbnail” in the manage gallery section (nothing happens), then try to edit the thumbnail, I get a 403 Permission denied error:
403 Permission Denied
You do not have permission for this request /wp-content/plugins/nextgen-gallery/admin/edit-thumbnail.php?id=1
* Operating System : Linux (64 Bit)
* Server : Apache/2.2.14 (Unix) mod_ssl/2.2.14 OpenSSL/0.9.8l DAV/2 mod_auth_passthrough/2.1 FrontPage/5.0.2.2635
* Memory usage : 25.07 MByte
* MYSQL Version : 5.1.42
* SQL Mode : Not set
* PHP Version : 5.2.11
* PHP Safe Mode : Off
* PHP Allow URL fopen : On
* PHP Memory Limit : 256M
* PHP Max Upload Size : 2M
* PHP Max Post Size : 8M
* PHP Output Buffer Size : N/A
* PHP Max Script Execute Time : 30s
* PHP Exif support : Yes ( V1.4 )
* PHP IPTC support : Yes
* PHP XML support : Yes
* GD Version : bundled (2.0.34 compatible)
* FreeType Support : Yes
* FreeType Linkage : with freetype
* T1Lib Support : No
* GIF Read Support : Yes
* GIF Create Support : Yes
* JPG Support : Yes
* PNG Support : Yes
* WBMP Support : Yes
* XPM Support : Yes
* XBM Support : Yes
* JIS-mapped Japanese Font Support : No