Warning: require_once(embed.php) [function.require-once] failed - WPG2 integration

I am totally lost - I am running the latest nightly builds (from 10/MAR/2006) of Gallery2.1rc2a and also WPG2.

Using latest vslider theme for WP and G2

On it's own, wpg2 works fine. On it's own, gallery2 works fine.
Using the wp-gallery2.php page, they work fine together.
BUT - when I come to log out, it says::

Warning: require_once(embed.php) [function.require-once]: failed to open stream: No such file or directory in /home/xxxxx/public_html/blog/wp-content/plugins/wpg2/g2embed.php on line 236

Fatal error: require_once() [function.require]: Failed opening required 'embed.php' (include_path='.:/usr/lib/php:/usr/local/lib/php') in /home/xxxxx/public_html/blog/wp-content/plugins/wpg2/g2embed.php on line 236

Also, when I go to the options page, there is nothing about gallery options there. I've de-activated, uninstalled, re-activated, reconfigured, re-uploaded the wpg2 plugin, which, as I say, works fine.

I've even added an echo statement to the wp2gadmin page to be sure it is seeing what it thinks it's seeing it says:

/home/xxxxx/public_html/gallery/embed.php

And for final reference, the path is

/home/xxxxx/public_html/gallery/

in advanced config. Oh, and just for good measure, I checked all the permissions, and loaded the file from a web-browser. And switched between php4 and php5. Totally lost now. 03:45 in the morning...I'd be really grateful is someone can help me with a bit of clarity by the morning