"Picasa Web Albums are now compatible with your Google Profile! Now when you use Picasa Web Albums, you can use the same profile name and photo that you use on your Google Profile. Your Picasa Web Albums will link to your Google Profile, and your profile will link to your public albums," informs Google's photo service.
After linking your Google Profile with Picasa Web Albums, you can edit the profile and remove the link to your public albums.
If you've previously used an alias to hide your Gmail address from the URL, you can no longer use it after merging the profiles. The only option you have is to use the same ID number from Google Profiles.
It's interesting that Picasa Web's code calls this feature "merged profiles softlaunch", which suggests that users aren't required to merge profiles, but that will change in the future.