Hi Daniel,
I think you did not set up the upload module correct.
Please refer to http://cutesoft.net/ASP.NET+Image+Gallery/Deployment.aspx step3, it has two sections, please try it one by one. The upload module code depends on your application pool mode.
3. Add Uploader httpModule to web.config's httpModules list
IIS 6.0 and IIS 7.0 Classic mode
<system.web>
<httpModules>
<add name="DotNetGallery.UploadModule" type="DotNetGallery.UploadModule,DotNetGallery"/>
</httpModules>
</system.web>
IIS 7.0 Integrated mode
<system.webServer>
<modules>
<add name="DotNetGallery.UploadModule" type="DotNetGallery.UploadModule,DotNetGallery"/>
</modules>
</system.webServer>
Regards,
Ken