Hi. Thanks for using this plugin.
apply_filters function would work for get the correct content, you can see more about this function here
In your specific case, the better solution would be using <?php echo apply_filters('the_title', $image->alttext); ?>
Let me tell you that the plugin was initially created for make ngg-gallery multilanguage (and I think you are using it)
If you have more question, please ask me.