"The problem with tagging is that it's a chore, so most people don't bother. But Picasa's name tag feature automates the process enough--and provides enough reason to use it--that I believe many users will take the tagging plunge. (...) The most impressive moments are when Picasa presents a large array of photos with the same face, and you can label them all with a single click," says Stephen Shankland from CNet.
The technology comes from the NevenVision acquisition and I'm sure we'll see more features that depend on image analysis in the future. Other new features in Picasa Web Albums: new views for exploring photos uploaded to Picasa Web Albums, Creative Commons licensing and an option to add photos by email.
Interestingly, the people tagging feature will not be available in Picasa 3, which will also be released today. The software will finally synchronize photos with Picasa Web Albums, but the synchronization is unidirectional. You'll be able to create videos from photo albums and export them to YouTube. There's also an improved collage maker that lets you control how pictures are arranged.
Picasa 3 and the updated Picasa Web Albums are set to be available today at 12 pm PDT.
Update: Picasa 3 can be downloaded from http://dl.google.com/picasa/picasa3-setup.exe (thanks, Anonymous!).