Google has just released Picasa 2.2 -- the newest version of their software that lets you organise your photos. As for what's new, that's a bit hard to say because their "latest updates" page seems to be offline. From what I can tell though, everything appears to be the same as version 2.1 -- or at least any changes aren't immediately noticeable.
You can only download the newest version from http://dl.google.com/picasa/picasa2-current.exe, it's not yet available for most people through the "Check for updates now" menu in Picasa or Google Pack.
There is a discussion going on about feature requests for Picasa 3.0 on Google Groups. There is one feature that people really seem to want -- the ability to publish photos to Flickr. That would be a great feature, but why doesn't Google just create a service just like Flickr instead of sending people to Yahoo?
Picasa is integrated with a program called "Hello" which I find confusing. Hello is supposed to make it easy to share pictures with your friends through an instant messenger style application, but I don't really see a difference between that and using something like MSN Messenger. An easy to use photo sharing service fully integrated with Picasa would be great for Google to develop.