Same issue as apricotree.
Simple work-around for those who don’t want to downgrade back one of the earlier versions:
1) Create a directory in your “wp-content” folder that you will use to upload your images to.
2) Upload the images you want to that folder using either FTP, your webhost’s file management system, or through the WordPress Media Uploader. (NOTE: Depending on how you have your WP installation setup, if you use the WP Media Uploader, your images will either end up)
2) From the WordPress backend/admin menu, go to the “Add Gallery/Images” sub-menu in the (NextGen) “Gallery” menu.
3) Under the “Upload Images” panel, you’ll see the “Import Folder” panel. Click it to open it up.
4) Navigate to the new folder you just created to upload your images.
5) Select that folder, and click the blue “Import/YOUR_FOLDER’S_NAME” button.
6) Next, click on the “Manage Galleries” sub-menu.
7) You should see the name of the folder you used to upload your images as the name of a newly created gallery. Click the name of this gallery.
8) Click the checkbox next to “ID” to select all of the images you’ve just uploaded from that folder.
9) In the “Bulk Actions” drop-down, select “Move to…”, and click the “Apply” button.
10) Select the gallery you want to move the images to, and click the “Ok” button.
You should now have all of the new images you uploaded in the gallery you need. One thing to note is that if you use the WordPress Media Uploader to upload your images, you will end up with about 3 copies of the same image at different resolutions, so make sure that if you use WordPress to upload your images, you only select the ones you want to move to your gallery in Step 8 (instead of checking the “ID” checkbox to select all of the images).
Hope this helps anyone else encountering this problem, and if anyone figures out how to fix the problem so we don’t have to use this method to upload images, PLEASE POST IT! Thanks!
