I feel your pain, but I just tried my first photo upload to my Picasa account, and it went through without a problem. It did show a screen showing the account name, and I was able to select the album the picture was sent to, but I didn't have to do any more than that. By the way, I didn't install any other apps in the phone for this.
Is is possible that you don't have your Picasa account signon stored in the "My Accounts" app on the phone?