This Works (hacked together from different parts of kitchen sink)

Titanium 1.2.1
iPad Version 4
Not sure about the SDK version, I think its the latest though (I went and manually DL'd it tonight, installed it, and then it downloaded some more stuff).

//
// create base UI tab and root window
//
var win = Titanium.UI.createWindow({  
    title:'Tab 1',
    backgroundColor:'#fff'
});


var imageView = Titanium.UI.createImageView({
    height:200,
    width:200,
    top:20,
    left:10,
    backgroundColor:'#999'
});

win.add(imageView);

var popoverView;
var arrowDirection;

if (Titanium.Platform.osname == 'ipad')
{
    // photogallery displays in a popover on the ipad and we 
    // want to make it relative to our image with a left arrow
    arrowDirection = Ti.UI.iPad.POPOVER_ARROW_DIRECTION_LEFT;
    popoverView = imageView;
}

Titanium.Media.openPhotoGallery({

    success:function(event)
    {    
    },
    cancel:function()
    {

    },
    error:function(error)
    {
    },
    allowImageEditing:true,
    //popoverView:popoverView,
    arrowDirection:arrowDirection,
});


// open tab group
win.open();

You'll notice at the bottom, the popoverView is commented out.

If I used this popoverView property in any way whatsoever, it hits the fan.

What gives?