To install: 
1) unpack all the files in this package. If you can read this, it seems that you managed that already.
2) upload everything you just unpacked somwhere to your webserver.
3) on you webserver (in the folder where you uploaded the files before), create a folder and call it ".thumbnails" (without the doublequotes, including the dot in the beginning).
4) change the permissions (CHMOD) on the .thumbnails folder to 777. You FTP-Client should be able to do this. 
5) You are finished, go eat a yogurt.

Two notes about the installation process: 
1) You only need .thumbnails ONCE in you main-folder.
2) DO NOT FORGET TO CHMOD. You don't get any thumbnails if .thumbnails isn't chmod777.

How to use: 
a) Beginner
Just upload your files in the location where all the files from the install-step are.

b) Intermediate
You can create subfolders (and subsubfolders and so on) to sort your pictures. These folders will be reflected in the gallery.

c) Advanced
You can rename the info.inc.txt to info.inc.php and edit it with a text-editor (you probably have to download it first and upload it again when you are finished editing).
Using this file, you can change the title and description that will be displayed allover the gallery. The file should be pretty self-explanatory.

d) Hero
You can put a info.inc.php in every single folder/subfolder of your gallery to describe its contents. 

How to comment: 
You can comment every single picture you put in your gallery. To do that, click on the little key-icon in the lower left of your gallery. You then need the password, it's 3431 in the standard setting. You can (and probably should) change that in the settings.inc.php file. 
While you are logged in, you'll see an "add text" link below your picture (in the full-size view). You can click here to add text and later click here to change the text. 
You can use any HTML-Code you like, just look out so you don't trash the layout.

How to change things: 
There are some settings (design, layout, thumbnails) you can easily change in settings.inc.php, just open it with any text-editor and look at it carefully.
For everything else you have to edit the sourcecode. That needs some knowhow, but you are welcome to edit anything to you liking.

Oh, by the way, this is all licensed under the GNU General Public License. This means that this program is free software; you can redistribute it and/or modify it under the terms of the GNU General Public License as published by the Free Software Foundation. A copy of this license is included with this gallery, it's called gpl.txt.

One more thing, the folder-image comes from the Open Clip Art Library: http://www.openclipart.org/