I had a similar problem, except I am using the native Windows 7 import tool instead of Windows Photo Gallery. Maybe rebuilding the Window Live Photo Gallery database would work for you. You can Google it, or try this link.
http://social.msdn.microsoft.com/Forums/live/en-US/54a5ad88-4cb9-4d1d-864b-e1e4ab73675f/windows-photo-gallery
The solution I used may be more complicated than it needs to be for Windows Live Photo Gallery, but it did fix my problem. My computer began importing ALL pictures, creating duplicates.
On a Windows 7 computer, I import pictures via a USB cable from a Nikon D3000. The camera uses Device Stage for import settings instead of Autoplay. I have it set up to import using the Windows 7 native import feature: "Import Pictures and Video using Windows." Several months ago instead of importing just NEW pictures, it began importing ALL the pictures on the camera every time it was connected. I also had the additional problem that the process would hang or freeze on the last picture, and would not allow you to Cancel. The only way to close the box was to do a Force Close using Windows Task Manager.
I found the suggestion to create a new User Account in Windows, transfer all my documents and pictures to the new profile, and try importing again. When I connected the camera to the computer, it imported all the pictures without hanging at the end. Now after taking new pictures, Windows imports only the new pictures.
Other things I tried were uninstalling and reinstalling the device, changing Autoplay and Device Stage settings, and editing the registry. None of those things worked for me.
Ben
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