well the addition to your htaccess just seems like your server needed to be setup for PHP so thats unrelated to Photopost
As far as the variable not being found some servers do not allow access to the file especially if it was not installed properly to be shared. Directions to correctly install mogrify are here
http://www.photopost.com/installphp.html
I would suggest you simply just install normal and then test to see if mogrify works for photo upload after you install. If not then try reinstalling mogrify or use GD2 to upload photos