Just in case Google monitors this...

The problem began when I changed my OS to 64 bit Windows 7.

I un & re installed the Picassa software MANY times.

I checked and rechecked all drivers, settings and anything else I could think of.

I was sure there was something wfrong with me/my system.

BTW...

If/when I upload pics from my camera via another pic s/w, then open Picassa, all photos are automatically added to the Picassa folders (with the name I gave it in the other s/w).

All this was about a year ago.

Last I checked (several months ago) users knew about the problem but nothing was listed on Google/Picassa.

It is now a known problem!

Progress!!