Usually flash galleries using XML will expect the XML and image resources to be in a place that is relative to that of the flash file & HTML - typically in the same directory. Depending on the contents of the XML file, there is usually a reference to an image folder and files that will be read by the flash component.

As covoxer says, the kind of problem associated with incorporating these elements is usually that the XML file the flash needs to read is in the wrong place (or missing) and/or the files (and/or directory) that needs to be read may be missing or in the wrong place.

It's rather difficullt to guess what the error is, without seeing example; even then we might need to see what is inside the XML file, or at least understand where each part of the puzzle sits in a working version.

This is not a WD7 problem as such, just that the environment the flash file depends on has not been put into place.