Okay, I'm back, and I think everything is running smoothly again.
First, sorry for the delay -- damn holidays!
sleary, I replicated your setup with ZP in a subdirectory of the WP install, and I think I found the bug that was causing problems. Although my version of the plugin WAS reporting itself as 0.2b1 correctly, so I'm not sure if you had the latest version installed.
plaintext: http://elbedesign.com/projects/zp_plus_wp/zenphoto-single-sign-on.phps
zipped: http://elbedesign.com/projects/zp_plus_wp/zenphoto-single-sign-on.zip
This version should report itself as v0.2. If it doesn't, something strange is going on.
Give it a shot and let me know if it does not behave as promised.
Thanks for your patience.