Finally I got it to work by using the zenpage theme and following the advice in this tread.
http://www.zenphoto.org/support/topic.php?id=282073#post-406270
It was the zenpage plugin not getting loaded. Go zenpage plugin, uncheck it, save, then re-check it and save again.
Now all the pages are published correctly and images as well
When I try to activate zpZkeleton I still get the above warning/error and I will post that in a new thread.