OK, here's what I already tried :
uninstalling and reinstalling the Live Picture Gallery alone (as a regular user with Admin privileges, also as Administrator)
uninstalling and reinstalling the entire Live application set (as a regular user with Admin privileges, also as Administrator)
also tried this (944221) Windows Live Photo Gallery stops
responding or will not start http://support.microsoft.com/kb/944221/en-us
also tried a registry hack I found somewhere which is forcing Live Picture Gallery to stop using DirectX or QuickTime for rendering (not sure which of them or if any and not other type of rendering)
also tried uninstalling all CODEC packs
also tried logging on to another account and checking if there works, no result...
WHAT ELSE CAN BE DONE ?