Finally I gave up on Windows as webserver, so in the meantime I have setup a clean WP setup on Ubuntu server, with the latest NextGen plugin. So now the http error and not being able to upload the photo’s are gone.
But, there is another problem. My site is slow as hell. I have just NextGen gallery plugin installed, so no conflicts there. I have like 20 galleries, with couple hundred pictures. Now to test, I reverted back to NextGen gallery plugin 1.9.13. Then I got a very fast and responsive website. Everything runs fine. So conclusion: stay away from NextGen gallery 2.x?
Regards,
Vikash