The explanation is actually stated in that dialog box. Windows Live Photo Gallery, for whatever reason, is needing to switch the color scheme to Basic. Programs sometimes require this because of memory or window management. In the case of Windows Live Photos, it might be due to some kind of media or thumbnail caching.
"If an application can't deal with Aero, you get flipped back to Windows Basic.
Some (many?) Java applications are like that (in my case, NetBackup Java Console Thing). I'm surprised that the Windows Live thing causes this problem."
