Installed your module along with jblibrary_J1.7_1.0.5 without problems.

I'm able to display images from some folders but not other folders in the same directory???

Examples (all from selecting from the drop-down list in the module itself via General Settings > Image Directory):

/images/stories/ (works fine)
/images/stories/demo/ (works fine)
/images/stories/food/ (works fine)
/images/stories/myfolder/ (doesn't work ... reports 'No Images Found!')
/images/banners/ (works fine)
/images/photos/jrs/game1/ (doesn't work ... reports 'No Images Found!')

In other words, it seems that any folder which isn't a default installation joomla folder doesn't work, even though the folders in question exist, are correctly named, have only jpg images in them, and are accessible to any other extension (e.g. other photo gallery extensions) which try to access them.

Why won't hoverbox access any of the folders I created?

Hi there,

Did you change the path to the image folder? By default it shoudl be just images/ in Joomla 1.7.

You can change it in the Media Manager options.