I can also imagine Picasa used another way: as a presentation stage for the entries in one's illustrated journal.
It works this way: students draw and write daily journal entries in Windows Journal using their tablet PCs. They save their entry in Journal's native format for editing down the road, but export a copy as a tiff image as well and save the image to their My Journals folder for Picasa to display.
If students do not have tablet PCs (and I realize rather few of them do), they could use other software, such as OpenOffice.org Draw, to create and save their entries.
In any case, the effect would be to create a "river" of entries students could view as a library or as a slideshow to encourage associations.