“SimpleViewer” – mentioned above is the easiest to use when integrated with Google’s Picasa (free photo viewer/editor).
From airtightinteractive dot com’s website, you can download the web template for use with Picasa. This is a one-time setup process (w/c is basically extracting the archive into the Picasa templates directory).
Here’s the process afterwards:
1. Open Picasa and select the photos you want to publish on your site, and click FOLDER > Export as a Web Page (CTRL+W).
2. Customize as per your preference, and click next then finish.
3. Upload the entire folder created and link it to your blog.
Short and sweet!
I encountered the same problem. It seems that it depends on your host. On 1 of my hosts, I couldn’t edit the files within WP. However, I’ve got the exact same installs on 2 different hosts and I can edit within WP.
It may have something to do with the way your host configures its server re: file ownership.
Just my two cents.