I did this and I think after a breif whip round it is certainly far better, but not without some other problems, maybe these will be easier to fix tho. What it seems to do after commenting out the code from post #4 and doing this replace and removing the duplicate dir setting is:
CSS image paths now appear to be ok without the dupe dir setting.
All photoplog links appear to be ok
My portal side menu links the relative ones that are template coded seem fine too.
The final bread crumb link is also good.
What appeared to end up getting broken from it is the navbar links on any photoplog page ie usercp etc as by default these are relative to the forum directory (so possibly the footer links aswell). Yes in the navbar I can make them relative from the webroot instead which is one answer. However other galleries do not need it in similar layouts and I am not sure why.
The layout I use is.
/portal
/portal/forums
/portal/photoplog
The layouts I have done elsewhere with other galleries is not much different but often the portal is in the webroot not in a subdir.
What I will do over the weekend is apply the change on the live site where I know all styles in use are in much better shape than some of the same styles on the test install. I should have a final confirmation on how its panning out then and I think one of those styles uses replacements aswell.