I downloaded Picasa a couple of days ago and while it has some good tools, I find the app itself unbearably difficult to use. The label tool is awkward and the scroll bar IS NOT a scroll bar but some kind of zoom shuttle thing. It's controls are all over the place and does not seem to allow for nesting of folders (thankfully iPhoto5 added this) and the folders are based on the actual file structure. It is too literal when it comes to the file system.
As a side question, can you export a RAW file from iPhoto5 as TIFF and work losslessly in an older version of Photoshop, like version 7? It isn't worth the upgrade price for me to go to CS and $79 for Photoshop Elements 3.0 seems a bit much if I can use iLife for a similar purpose.