When I instal
Downloading update from https://downloads.wordpress.org/plugin/nextgen-gallery.zip…
Unpacking the update…
Could not create directory.
This is a permissions issue. Ensure the directory is writable by apache. Plugins are unpacked into the wp-content/plugins directory, so I would first attempt writing to the directory as apache:
sudo -u apache touch /path/to/wp-content/plugins/test.txt
Set permissions accordingly to correct the issue. You can read about permissions here: http://www.linux.com/learn/tutorials/309527-understanding-linux-file-permissions
You can read about the correct file permission scheme for Wordpress here: http://codex.wordpress.org/Changing_File_Permissions#Permission_Scheme_for_WordPress