I think I know what your problem is. I have a Canon scanner that worked fine with XP and it didn't work with Win 7. I also had the problem with Picasa and importing. I called Canon support & they solved the problem with the scanner. As an added benefit, it also fixed the Picasa importing problem. Turns out, there was a folder in the Windows/twain_32/ directory that was causing both problems. The folder belonged  to a Dell printer that I tried to install under Win 7. Because the printer isn't supported I purchased another printer. But the folder for the old printer remained in the Windows/twain_32 directory. We removed the folder and both problems were fixed.