I am having the same problems.
I have tried several approaches to the problem. Most recently, I uploaded directly to a gallery folder and then select SCAN FOLDER FOR NEW IMAGES, and still does the same, only recognizes one image at a time and give me the fatal error. I can repeat the steps and get another image recognized, but it follows with the fatal error again. I’m looking for another gallery plugin, too many problems and clients to convince the extra steps are worth it and it saying it be resolved soon.
Fatal error: Cannot redeclare class nggimage in …..
NexGen 1.2.1
WP 2.7.1