Ok.. more info.
This error only seems to apply to me as Administrator.
Line 68 reads:
$dashes = str_repeat('--', $category['level'] - 1);
So, registered users are able to create categories (in admin panel I can, not through website)... but as admin I cannot. I've checked and re-checked the permissions... Administrators groups is allowed to create categories. But I have it down to a permission problem.. I think
Another question: Is the vbgallery download here the same as it was on vbadvanced? It shows as the same version, so I am assuming my files are up to date.