Just trying this out, and while the plots are generated and best k predicted, the report is not generated. RScript seems to be working and I have ghostscript v9.05. Running on Biolinux 7 system (Ubuntu 12.04).
Full error message is:
R cannot output png files; testing if ghostscript is present.. HTML report not generated (Kmergenie is probably running on a cluster): neither R can create png files, nor ghostscript is installed