Well I have found a the solution for me.
Recently added a new admin to my site. and upgraded to WP3.1 then I lost the ability to add galleries. I rebuilt site to clean install and had the same problem. Went crazy checking permissions until I was numb.
Solution
Went to Nextgen Roles and set all levels to contributor.
I can now once again add galleries and pictures, Yeah!!!
It looks like a small bug when there are multiple “admins”
Hope this helps someone else.
Didn’t work for me :/