A gallery is a group location that houses files. The number of files and the space they take up can be nearly limitless (that is, limited only by the parameters of the folder where it is located.) Files can be uploaded, viewed, downloaded, or deleted. To upload to a gallery, you can make use of the gallery's drag and drop capability.
How is it different from other applications?
While other applications can use images, a gallery uploads files and allows for download. You can subscribe to RSS for a media gallery. This is only possible in one other application, forums. (Wikis have page notifications and blogs have blog notifications.) A gallery does not store an image used in another application; instead, it is a nearly independent application.