Permalink problems?

I have both Permalinks and Short URL's active in Site Admin.

I have set permalinks on the Album creation page, last text field for permalink, I type GIFTS into the text field, click SET and then that name shows up just above the text box as a listed permalink in the Permalink section.

But when I try to reach that link such as www.mydomain.com/gifts nothing comes up. I still must go to www.mydomain.com/v/gifts. Is this right?

Thanks,
Igrushki

Gallery version = 2.1 core 1.1.0
PHP version = 4.4.2 cgi
Webserver = Apache/1.3.33 (Unix) mod_throttle/3.1.2 DAV/1.0.3 mod_fastcgi/2.4.2 mod_gzip/1.3.26.1a PHP/4.4.2 mod_ssl/2.8.22 OpenSSL/0.9.7e
Database = mysql 4.1.15-standard-log, lock.system=flock
Toolkits = ArchiveUpload, Exif, NetPBM, Getid3, Thumbnail, Gd
Acceleration = none, none
Operating system = Linux rampart 2.4.29-grsec+w+fhs6b+gr0501+nfs+a32+++p4+sata+c4+gr2b-v6.189 #1 SMP Mon 13:23:30 PST 2005 i686
Default theme = carbon
Locale = en_US
Browser = Mozilla/5.0 (Windows; U; Windows NT 5.1; en-US; rv:1.8.0.4) Gecko/20060508 Firefox/1.5.0.4