It looks correct. There should be a space between the lines screenshotPath & [GAMMA] but that shouldn't make a difference.
Would you be able to post a screengrab of your SH3 Program folder (in list/detailed view), it might help.
Also, have you tried a different rez, maybe 1280 x 1024.
It's very strange. Almost as if the SHIII.sdb is not being written to when you run the Install.bat. BTW, does a cmd box flash up when you run the bat file?
Actually, later, rather than mess with the MSACT program, I can upload the file sets with the fix applied already and should only have to copy & paste. Worth a try and if it doesn't work after that, it must be a file issue on your PC but not related to SH3.
EDIT - Just tried to apply the fix to the files I have here but they won't work without SH3 being present. Will have to wait until I'm home.