If your Windows Live Photo Gallery freezes, hangs or does not start or work properly, then this article may interest you.
To resolve this issue in Windows 7, you can do the following:
Close Windows Live Photo Gallery.
Type %userprofile%\AppData\Local\Microsoft\Windows Live Photo Gallery in start search and hit Enter.
This will open the Windows Live Photo Gallery App Data folder.
Here, delete any existing instance of “OLD_Pictures.pd4″ and “OLD_Pictures.pd5.”
Next, locate and then right-click “Pictures.pd4″ or “Pictures.pd5.”
Rename “Pictures.pd4″ to “OLD_Pictures.pd4″ or rename “Pictures.pd5″ to “OLD_Pictures.pd5.”
Now relaunch Windows Live Photo Gallery and see if that worked!
Alternatively, Microsoft has also released Fix It solution that addresses this issue in Windows 7, Windows Vista and Windows XP. This Fix It downloads the ATS Engine and fixes this problem for you automatically.
Visit: Microsoft KB944221 to download the Fix It.