Unable to configure embedded gallery in Drupal 4.7.3 site.

Hi,

I'm having this Gallery2 install problem and i've posted the same question in Drupal and Gallery forums but i did not find any solution so far and now i'm trying my luck here. And here is my story.

I don't even know what version i'm installing because i had Drupal 4.6.3 and drupal gallery.module on my server and last night i upgraded to Drupal 4.7.3 and tried to configure a photo gallery, but the page came up with the following message when I click on Gallery.

"Unable to initialize embedded Gallery. You need to configure your embedded Gallery."

Then i checked the latest module under drupal modules list and downloaded "gallery-4.7.0.tar" file. And i followed the steps given in INSTALL.txt file.

1. Created gallery2 directory under /var/apache2/www/ and it is the same location where my drupal site files are located. ( note here: I don't have any specific dir. for Drupal site and everything is made available under /var/apache2/www).
2. I did not install these modules (image block & image frame) yet because i could not find install instructions and INSTALL.txt also says that i need to activate them in Gallery2. I don't know how can i activate them without installing Gallery2 non-embedded/embedded. I am totally lost here.
3. Logged out from site and copied the entire gallery directory (which is extracted from gallery download) to my drupal modules dir. which is
/var/apache2/www/modules.

4. Enabled the gallery module in administer -> modules in my drupal installation.

5. And i am stuck at this step: Go to administer -> settings -> gallery and enter the URI of Gallery2:

My dir. settings are like this.

URI of Gallery 2: /gallery/ and selected autodected

--------------------------------------
* Embedded Gallery2 Status:
o 'URI of Gallery2' variable: Error
+ URL derived from http://www.mullapudi.info/gallery/ is invalid
o PHP Memory Limit: Success
o Overall Status: Error
+ You need to fix the above errors before Gallery2 will be embedded in Drupal.
* The configuration options have been saved.
--------------------------------------

I tried to several options by selecting manual and entering different paths but no luck.

And i need to note here that i don't have any files under my gallery2 (/var/apache2/www/gallery2) directory which i created manually. While i am going through different forum threads i did see discussion on files "embed.php & main.php". I don't have any of them on my server. Now i'm wondering whether my issue is something to do with those files. Please let me know. It would be greate help if someone can evaluate my problem.

PHP version: php-5.0.5
Database (e.g. MySql 4.0.11): 4.0.15
Activated toolkits (e.g. NetPbm, GD): gd-2.0.33 & NetPbm
Operating system (e.g. Linux): Solaris 10
Browser (e.g. Firefox 1.0): Mozilla 1.7

Thanks in advance
paradesi