This "solution" does not work on my HP-Pavilion Win7(64bit). The Autoplay comes up and you can select "Copy photos to your computer using Picasa 3", then Picasa3 launches and immediately freezes. Back to Ctrl-Alt-Del.
Picasa is the only program that seems to have this problem. I can use the HP Media Center with no issues, as well as WinExplorer to copy photos from Camera to PC. Currently I have to manually copy to my PC to a Picasa monitored directory, then start Picasa and it updates the photos from that directory.
Basically, the import function in Picasa is broken for us who have this problem. Whether it's Picasa... Drivers.... Hardware/CPU uniqueness...or interfering software... I don't know; but the result is Picasa Import is broken for us.