OK, I didn't get that error when I installed PG. What version of PowerGallery are you using, PowerGallery 121?
My 'mysql_num_rows' function comes at line 55 of my choosegallery.php page, and is part of the SELECT statement (from which it gets the number of rows in the query). The 'mysql_num_rows' error can not be caused by your version of MySql/PHP (I don't think) - as the function was around for at least PHP4. Perhaps you could try re-downloading the solution and uploading a fresh version of that page.
As I say, my PHP is dismal, but the only reason I can think of that the error is occurring is that the SELECT query isn't connecting with the database. I assume that setup has created the database OK.
I will do another setup on another (but similar) server later, and remember to make notes of any extra steps I take. I will post back if anything occurs to me.
Just for info, the requirements as listed in the PowerGallery page are that version of MySql should be 5+ (which suggests that Sandy's and my setups should be OK!) Also step one, the requirements check, gives all green lights.