I was looking for something exactly like this. I tried simpleimage flash gallery, and it had troubles with multiple folders. This one is very slick. You can setup folders very easily (just make sure you upload to that folder). When creating menu items, make sure you manually type in the folder that you want to be default, and voila!

I ran into a couple problems though. Most annoying is that if you create a browser link as a child to another main menu item, the full size image links break (it adds an extra /).

Also as others, I wish I had control over how many images per page were displayed, and wish the global settings were actually global.

But besides those little niggles, it's a great gallery, and free at that, which is great.

Thank you for creating/updating this extension.