I have noticed that the status dialog sometimes fails during long synchronizations. I haven't yet figured out the cause, but the important thing to notice is that the sync continues to run on the server. You can prove this to yourself by looking at the processor usage in Task Manager (the w3wp.exe process should be using 50% or more) and noticing that the thumbnail and compressed images continue to be created in the media objects directory.
I recommend using Task Manager to keep an eye on it. When it drops to near zero, the sync has finished (or failed due to IIS restarting, etc).
The bug is only in the browser trying to get status updates from the server, not in the sync itself. While annoying and something I want to fix, it shouldn't be a cause for great concern.
Roger Martin
Creator and Lead Developer of Gallery Server Pro