Radiation very close in to the galactic center would make life as we know it on Earth impossible, though this does not say anything about the development of other life forms. Farther out from the galactic center there is still an enormous number of stars, around many of which it is possible that planets exist in the range of distances from their primary that would allow the development of life as we know it.

Gamma-Ray Bursts, or GRBs, are the result of a particular sort of supernova, ending the main life-cycle of especially massive stars (see e.g. http://imagine.gsfc.nasa.gov/docs/science/know_l1/bursts.html for more information). Since most of the radiation from GRBs comes out in a highly collimated pair of beams, it is unlikely for GRB radiation to hit any particular star's vicinity. The danger is somewhat higher in a galactic neighborhood with an especially high fraction of the right type of massive stars, but even then, since GRBs are relatively rare, the overall likelihood of a GRB ending life in a particular system within a particular year, millennium, or even 100,000 year stretch is infinitesimally small.

The bottom line is that the solar system's galactic location is not especially better than any number of other stars' locations, and GRBs are not a major source of danger compared to many other potentially civilization-ending, or even life-ending cosmic cataclysms possible.

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