"The house is not very pretty."
Translation:Huset er ikke veldig pent.
Yes, it would be interpreted as an understatement (read: ugly) unless you stressed the word "veldig" in pronunciation.
They are used for different gendered nouns. 'pen' is used to describe indefinite masculine/feminine nouns, 'pent' to describe indefinite neuter nouns, and 'pene' to describe plural and definite nouns.
That's only when the adjective is in front of the noun. Otherwise you'd use the indefinite.
"Den pene katten" vs "Katten er pen".
Just spent like three minutes googling what was going on here (from a different sentence) and why it wasn't "pene" and finally found this, thank you lol. Such an odd rule.
There's a difference in nuance:
vakker(t) = beautiful
pen(t) = pretty