So, I recently hit the error in the title of this post, and it took me a while to figure out what was wrong. I'm using dreamhost, and apparently people have had other issues resulting in this error in the past. However, in my particular case, the problem was that the user I was trying to use to login didn't have access to the root gallery. Gallery Remote also didn't properly display an error here; I figured it out by trial and error on another gallery and with different users.
So, if you have this problem, make sure the user you're logging in as has access to the base gallery folder. To do this, login as an admin, then select edit permissions on your root folder (i.e. the one that you see when you first login). Add the ability to add sub-albums and sub-items to that user's persmissions, and you should be good to go.