I absolutely LOVE the Picasa software (I haven't opened Photoshop for personal photos in ages) and the Picasa Web Albums is a nice service.
But is it just me or is the one thing Google seems to have a hard time getting a good feel for is personalization and social networking? Sure they bought YouTube, but they didn't build it or its user-base; nor have they really had it long enough to leave their mark on it. Blogger is arguably the best product in their line-up where they finally appear to be getting a better feel for this aspect.
The interface and integration with Picasa (and now Blogger) is very nice. But IMO it just doesn't seem to encourage social interaction or browsing through networks of friends, groups, tags, etc. Like a lot of Google products, it just comes across as rather cold and clinical. Functional? Absolutely - just like most Google products. But fun or personable (which is more important for things like photos and video v/s maps and email)?? I guess that's a matter of opinion, but I just don't get that vibe from it yet.
Like in Google Video, Picasa Web Albums dedicates most of the space to the photo and very few pixels to the author. People might find this strange and intimidating. Both Google Video and Picasa Web Albums lack profiles, while in Picasa Web there's no open door that invites you to discover interesting content. Google doesn't integrate already existing communities from Blogger or orkut, and each new product has its own profile, its own contact lists and connections. So why should you invest time and energy into a "cold and clinical" site instead of going to a site that cares less about user interfaces and more about human interactions?