I just tried the latest Picasa 2.5 beta and I do like it:http://fileforum.betanews.com/detail/Picasa_for_Windows/1067993856/1
Unlike previous versions it does show selected folders structure and now somewhat supports DNG (read below).
Captions and Tags(AKA keywords) get written to JPEG iptc metadata (not core) but not to DNG xmp metadata, which is my major gripe at the moment. Hopefully the final build will read/write DNG captions/keywords.
Saving (another new option) any RAW file will produce a JPEG with properly embedded caption/tags albeit apparently stripped of exif data, the original RAW file getting saved in a "hidden" Originals subfolder.
IMHO at the moment, to embed tags&captions while working with Picasa and RAW files, it is best to shoot RAW+jpeg and tag the jpegs (as if they were "sidecar files" containing IPTC data & the full size preview of course).
At least you get the benefit of keeping the camera RAW files to use with nonDNG raw converters (such as Bibble in my case ...). Picasa can be set not to show raw files (since you have the camera jpegs to browse/tag)
Picasa is not colorspace aware but I can live with that by just using a fast loading external viewer for my properly marked a-RGB files (which I wouldn´t print with Picasa either).
Picasa is obviously not a profesional solution, but it is so easy to browse, search, tag with it that I find it to be quite attractive for not too advanced users that use simplified keyword sets (and it is free of course), like me.
And BTW another interesting feature is that this new version allows to "geotag" your pictures with the help of GoogleEarth. Latitude, longitude, altitude and GPS data get written to JPEG exif metadata (I have checked with cPicture)