The API has already been available unofficially, but starting today it's a reliable way to interact with Picasa Web Albums. The API lets you send or receive information formatted as GData feeds. After securely authenticating to Google, you can request all the albums and the photos from an album, create new albums, replace and delete photos, and also obtain search results.
Using the API, you can create a new interface for Picasa Web Albums, or you can let users upload photos to Picasa Web from your desktop or web application. Sven Mawson from Google offers more ideas: "Have a great idea for integrating your photos and tags into a semantic network? Want to add a slide show of your favorite photos to your homepage and include user comments? How about autotagging your photos based on image analysis or photo description or title?"
An interesting example is Picnik, which is a very nice online photo editor. Picnik imports photos from your computer, from Flickr, Picasa Web Albums, and search results. If you choose to import photos from Picasa Web, you'll enter your credentials (Picnik should use Google's authentication API), and select photos from your albums. After doing some basic editing (you can crop, resize, rotate, apply some filters), the photo can be saved to Picasa Web Albums, but it won't replace the original copy.
Another new API is for Google Notebook, but this one is limited to read-only access to public notebooks. As more Google applications get APIs, the data you store on Google's servers will become easier to access from other interfaces securely, easier to backup and more valuable.