Thanks for your response Ilione, as I said if I upload a PNG it tries to produce thumbnails, but they're zero length, which is only slightly better than not producing a file at all. I'll have another go with that though.
janantha, I'm confident that it's neither of those issues. The folders are of course already writeable by the webserver. The cache folder has the same permissions as the album folder, and I'm not having any problems uploading photos to the album folder.
I've already tried disabling mod_rewrite several times, it makes no difference.
I'm pretty sure it's the gd issue I referenced in my post, if anyone knows about GD, could they please drop a word here, most of my sites are on a different server, so maybe I'll try an installation there, but I'd still like to get this working on my personal site.
I've already asked the admin of this box to have a look at gd for me, but I believe it would still be useful to get any possible issues with gd documented in the support forums.