Hello, I´ve installed Zenphoto 1.2.4 and everything seems to be ok, but when I uploaded album with a test picture and click on the thumbnail to see bigger picture it says Error 404.

Link is here. http://imeline.planet.ee/austraalia/

What might be wrong?

Your htaccess file is probably either not correctly configured, missing or modrewrite is not supported on your server.
Setup should do that for you and report errors. Of course you should also upgrade to the recent release anyway.