
Well with Picasa 3.05 on OSX, importing recognises the geo-tag, and, sound of trumpets blowing... uploads intact to Picasaweb!
It looks to me like the little cross-hairs symbol in the lower right of a thumbnail indicates geo-tag. Click on the thumbnail in Picasa, then do apple-I (get info) and you see the geo-tag:

In Picasaweb after the photo is uploaded

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