How do these types of TGP's make money?
 

Ones that use other people's galleries. What does the site owner get out of this?

Its simple they get bookmarkers to come back and check out the new stuff and they will buy off the banners of the trusted tgp also galleries linking back to the tgp send traffic and aid in page ranking and se listings as well so its a win win for all :)

So basically TGP owners that don't list their galleries can only make money by selling gallery spots?

Selling spots is one way when you know your traffic another is list some sponsor hosted galleries of your own :)

What's one way to lose money on a TGP - I hear alot about that. Is that basically a bandwidth/non hosted issue?

The only way one can lose money is BW costs or if they are buying traffic trying to build it up but it never happens. So after a few months and $100's invested in traffic they still have no bookmarkers and very little sales made.