Lazyest Gallery works by accessing folder names through the URI of the web page.
A lot of users ask me why Lazyest Gallery does not support folder names with all the characters the underlying operating system supports. The reason is that some characters have a special function in XHTML e.g.
& is for html entities like & = & ë = ë
% is is used for encoding special character like %20 = space %40 = @
Other characters like square brackets [ ] create havoc in shortcodes.
Of course, I could start programming to encoding special chracaters, but I would have to dig too far in the code to change all references to folder names in the URIs to solve it all. But Hey, we are talking about LAZYEST Gallery 
Luckily, You can use the folder’s description (caption) to show to your blog’s visitors. Using folder descriptions also eliminates the need for very long folder names. It is much easier to work with a URI like
myblog.com/gallery/?file=folder1/
than a url like myblog.com/gallery/?file=hotel%20in%20malibu%20in%20august%202004/ when you can have a folder description “hotel in Malibu in August 2004″ for folder1.
When you make a new folder in the Lazyest Gallery File Manager, the plugin accepts:
- a..z lower case
- A..Z upper case
- 0..9 numbers
- _ underscore
- - hyphen
- ( ) parenthesis
- space
- . dot (from version 0.11.1.6)
That should be enough to create a myriad of folder names.
Please be aware, when you add new folders with ftp or other tools, that other characters could break the working of Lazyest Gallery.
same story goes for image names