Just spend hours working out how to do this. If you’re moving pictures to another PC or your Picasa db gets broken, you may lose all your albums. The album information is stored alongside the Picasa database, in xml files with a .pal extension, which is irritating – you have to back up that folder too.

It is very simple to get your albums back, just do what this thread says, and all works fine: http://www.google.com/support/forum/p/Picasa/thread?tid=4267d3f621027f95&hl=en. All you have to do is copy your .pal files into any folder that Picasa is watching, and it will pick them right up.

This guide worked for me (copied here in case the thread disappears):

Transfer album definitions from Computer A to Computer B. There are the same photos, but placed in different location on the destination computer.

1. Edit the Albums in Picasa on Computer A
2. Exit the Picasa on Computer A. The PAL files are created in Picasa2Albums by this.
3. Copy files to temporary folder and edit the paths to the photos in all the PAL files to conform the photos location on the Computer B.
4. Start and exit Picasa on Computer B to refresh the Album status in the Picasa internal database
5. Start Picasa.
6. All referenced photos from edited PALs have to be visible for Picasa otherwise the Albums are not crated or empty. In order that, make the photos visible for Picasa in Tools -> Folder Manager …
7. Put the PAL files to any monitored folder. If it is “Scan Once” folder, you have to trigger licking by opening Folder Manager again – just enter, end exit by OK button.
8. The new Albums are imported to Picasa on Computer B having all photos inside. Source PAL files are deleted.

All the other crap you’ll find around the net about changing the dbid to null and stuff doesn’t work in the latest version of Picasa.

Hopefully the next time this happens to me, I’ll find my own blog post!