Yes, as far as I can tell, I have everything configured properly.
Like I said it DID create the new gallery on Smugmug, but after progressing very slowly he progress bar reaches the end and I get the pop up message I wrote of. I check Smugmug and it's just an empty gallery.
The file are kind of on the large side (Out of a Sony A900, 24mp) but not humongous by today's standard.
I will try to export them to the desktop, then upload using Smugmug's uploader, and see if that works.