emunand = the emulated system firmware (which runs off the SD card) - you use gateway while using emunand - it is in this mode that you can press select and have all your roms pop up etc
(sys)nand = the firmware actually on the 3DS
I think we need to back things up a bit - take a look at this guide on how to properly set up your gateway http://www.maxconsole.com/maxcon_forums/threads/286487-3DS-N3DS-Gateway-Ultra-Guide
Or check the gateway zip file - I think they have a new PDF guide thats a lot clearer than it used to be!
Try setting up the gateway as per the guide/as below and see if FE:if will work for you.
Briefly [assuming v4.x firmware on the 3DS] -
1) use an R4 (blue card that came with the gateway) in your 3DS to run gwinstall.nds
2) get a new SD card (as the next few steps will wipe data) and copy launcher.dat onto it, insert SD into 3DS, put your main gateway cart into 3DS, including microSD with your FE:if .3ds file on it
3) start 3DS, go into settings, other settings, profile, DS profile and hold L - you hsould now be into the gateway menu
4) select "format emunand"
5) repeat step #3, except this time don't hold L - you should now boot into emunand
6) go to settings, check that version number begins with GW3Dxxxxx, if it does, proceed to update your firmware (without exiting settings app)
7) after update the 3DS will probably tell you to restart, so turn off and do step 3 again, without holding L
8) when you get into emunand press select when the cursor is over the cart icon on the homscreen, and the gateway rom list should appear. select your game by pressing A, it should appear as the inserted cart. start and play game as normal.
Sorry, I know this post is a bit off topic as its not really relating to the FE:IF translation patch per se...
Anyway, LLH, if you still cant get gateway set up its prob best to enquire on other forums since I do not want to stray any further off topic.