I’ve been using Picasa to organize my photos on my desktop ever since Charlie suggested it to me. It’s good and useable, and fits well into my photo tagging system, however I find that it doesn’t really scale for a lot of photos – you end up with too many albums or you end up with too many photos in each album.
I started out using Picasa 1.618 and eventually upgraded to Picasa 2. Picasa 2 introduced a lot of photo fixing features (hardly ever use), as well as web albums (don’t need it). But it lost one feature which are the thumbnails in the folder view of each album. i think that feature is interesting so for awhile I downgraded back to Picasa 1 (you can use both concurrently!).
Lately however, I’ve switched back to version 2 as the newer version has support for the IPTC keywords, and better resolution thumbnails. I also solved some of my Collections problems by not making my Picasa.ini files read only; so I only had to move each collection once.
So Picasa 2 will remain my photo organizer of choice, until it turns out that I need something better like Lightroom or Aperature.