Hi Guys,
The above fix didn't work for me. I am using DNN 3.2.2, forums 3.20.01 and gallery 3.01.11.
I could not insert the emoticon correctly. After a fair bit of testing, this has worked for me...
Note: I wanted to insert a lot of emoticons for my forums, but decided to allocate a new album for each type of emoticon, such as one for "angry", "laughing", "winking" etc...
Downloaded latest gallery 3[1].1.11. Uninstalled old version and installed this new version. This allowed me to get to an option called "Configuration" on the ForumSmiley page. When I set the rows under displaying to more than the default "2", I now insert a smiley correctly. This was all that was changed for me in the end to fix the emoticon tag appearing instead of the actual emoticon. It seems to me that there is an issue with inserting emoticons from page 2+ from the emoticon listing.
Anyhow, thought I would share this with others, and it might help the leads to track a fix.
Cheers.