If you are a Google+ user, Picasa Web Albums offers more free storage, according to Picasa Web's help center, "photos up to 2048 x 2048 pixels and videos up to 15 minutes won't count towards your free storage".
If you upload photos from Google+, they're automatically resized to 2048 pixels on their longest edge, so they don't use the 1 GB of free storage that's available in Picasa Web Albums. Most people can't use Google+ because it's invitation-only, so the current rules still apply to them: only the photos up to 800 x 800 won't count towards their free storage quota.
Like Google Buzz, Google+ uses PWA to store photos. You can upload photos from the Google+ interface and even automatically upload the photos taken with your Android phone. Google+ lets you add captions and name tags to your photos, rotate them and apply different filters using the built-in image editor. Now your friends can tag your photos and you'll receive a notification when someone tags you in a photo. The downside is that "tagging a person in one of your photos in PWA or Google+ will share the album with the person tagged".
[Source: Picas Help Center, Thanks, Alex]