i am totally confused here?

Warning: MkDir failed (Permission denied) in /home/sites/site178/web/modules/Photo_Gallery/classes/gallery/UserDB.php on line 35
Error: Unable to create dir: /home/sites/site178/web/albums/.users
Fatal error: Call to a member function on a non-object in /home/sites/site178/web/modules/Photo_Gallery/classes/gallery/UserDB.php on line 99

Check to see if your webserver is compiled with mod_rewrite. Mod_rewrite allows the Gallery to use shorter URLs that are easier to read and look nicer when you mail them to your web-challenged relatives. It's not an essential feature.

Warning!
Either mod_rewrite is not installed or your .htaccess file is not enabled (see above). Either way, we'll have to use longer URLs in the Gallery. If you want to turn it on I'd suggest that you make sure that your .htaccess file works and then if it still doesn't work you may need to reconfigure and rebuild Apache with this flag:
--enable-module=rewrite

Check to see if jhead is installed so that Gallery can examine EXIF headers embedded in images created with most digital cameras

Warning!
I can't find jhead. If it's installed and not in the path of the webserver user that's OK -- you can specify the path to jhead by hand on the following page. If it's not installed, you can install it yourself. jhead is a public domain EXIF parser. Source, linux binaries, and windows binaries can be found at the jhead homepage.

Path to NetPBM
The path to the directory containing NetPBM on your system. If you downloaded NetPBM from the Gallery download page, don't forget to make the files executable. Eg. /usr/local/netpbm or /usr/local/bin or c:appsnetpbm = /home/sites/site178/web/netpbm

Highlight size
The target size (in pixels) of thumbnails shown in the gallery page (highlight images)
= 200 (default)

Zipinfo
The filesystem path to the 'zipinfo' binary. This is optional so if you don't have it, don't worry about it too much
= /usr/bin/zipinfo

Unzip
The filesystem path to the 'unzip' binary. This is optional so if you don't have it, don't worry about it too much
= /usr/bin/unzip

EXIF
The filesystem path to the 'jhead' exif parser. This is optional so if you don't have it, don't worry about it too much. Eg. /usr/local/bin/jhead or c:binjhead.exe
= /home/sites/site178/web/jhead.txt (< -- not having a problem anymore- see step 4)

Thumbnail image
The filesystem path to the thumbnail image to show for movies. Eg. /home/foo/thumbnail.jpg
= /home/sites/site178/web/modules/Photo_Gallery/images/movie.thumb.jpg

Album directory
The full path on physical disk to the directory where your photos will be stored. This directory should start off empty -- Gallery will fill it. Note that this directory needs to have write access by the user who is running the web server (in your case this user is root)
= /home/sites/site178/web/albums

Temporary directory
The filesystem path to a temporary directory. Eg. /tmp or c:windowstemp. Note that if you have open_basedir configured on your system, then this temporary directory must be inside the open_basedir path! In that case you may need to create the tmp directory yourself and make sure that it's writable by the webserver process
= /home/sites/site178/web/temp

Gallery URL
The full URL to the Gallery web application. Eg. http://www.foo.com/gallery.
= http://www.nbguy.com/modules/Photo_Gallery

Albums URL
The full URL to your album directory (specified above) on your web server. Eg. http://www.foo.com/albums
= http://www.nbguy.com/albums

Note that the requirements for this value have changed since v1.1

Advanced) Session variable
This is the session variable used to contain all Gallery session information. Change this if there is a conflict between Gallery and another PHP app on your website
= gallery_session

/* Version */
$gallery->app->config_version = 30;

/* Features */
$gallery->app->feature["zip"] = 1;
$gallery->app->feature["rewrite"] = 0; // (missing GALLERY_REWRITE_OK -- it's optional)
$gallery->app->feature["mirror"] = 0; // (missing mirrorSites -- it's optional)

/* Constants */
$gallery->app->galleryTitle = "NBGUY Photo Galleries";
$gallery->app->pnmDir = "/home/sites/site178/web/netpbm";
$gallery->app->highlight_size = "200";
$gallery->app->zipinfo = "/usr/bin/zipinfo";
$gallery->app->unzip = "/usr/bin/unzip";
$gallery->app->use_exif = "/home/sites/site178/web/jhead.txt";
$gallery->app->movieThumbnail = "/home/sites/site178/web/modules/Photo_Gallery/images/movie.thumb.jpg";
$gallery->app->albumDir = "/home/sites/site178/web/albums";
$gallery->app->tmpDir = "/home/sites/site178/web/temp";
$gallery->app->photoAlbumURL = "http://www.nbguy.com/modules/Photo_Gallery";
$gallery->app->albumDirURL = "http://www.nbguy.com/albums";
// optional mirrorSites missing
$gallery->app->showAlbumTree = "no";
$gallery->app->cacheExif = "no";
$gallery->app->jpegImageQuality = "95";
$gallery->app->timeLimit = "30";
$gallery->app->debug = "no";
$gallery->app->use_flock = "yes";
$gallery->app->expectedExecStatus = "0";
$gallery->app->sessionVar = "gallery_session";
$gallery->app->userDir = "/home/sites/site178/web/albums/.users";
$gallery->app->pnmtojpeg = "ppmtojpeg";

/* Defaults */
$gallery->app->default["bordercolor"] = "black";
$gallery->app->default["border"] = "1";
$gallery->app->default["font"] = "arial";
$gallery->app->default["cols"] = "3";
$gallery->app->default["rows"] = "3";
$gallery->app->default["thumb_size"] = "150";
$gallery->app->default["resize_size"] = "640";
$gallery->app->default["fit_to_window"] = "no";
$gallery->app->default["use_fullOnly"] = "no";
$gallery->app->default["print_photos"] = "shutterfly";
$gallery->app->default["returnto"] = "yes";
$gallery->app->default["showOwners"] = "no";
$gallery->app->default["albumsPerPage"] = "5";
$gallery->app->default["showSearchEngine"] = "yes";
$gallery->app->default["useOriginalFileNames"] = "yes";
$gallery->app->default["display_clicks"] = "yes";
$gallery->app->default["public_comments"] = "yes";

Warning: MkDir failed (Permission denied) in /home/sites/site178/web/modules/Photo_Gallery/classes/gallery/UserDB.php on line 35
Error: Unable to create dir: /home/sites/site178/web/albums/.users
Fatal error: Call to a member function on a non-object in /home/sites/site178/web/modules/Photo_Gallery/classes/gallery/UserDB.php on line 99