Sites such as Picasa (and Flickr) offer some storage space at no cost, but if you want to use these sites for storage over a period of time the free allocation limit will soon come into play. I have a Pro account for Flickr (no limit) and the cost of $25 a year seems very reasonable as I continue to add images.
I thought I read that Picasa was offering unlimited storage (the free version was 1 gig) and investigated. It is a little complicated. The free limit is still 1 gig, BUT smaller images no longer count against this limit. My interpretation is that this has something to do with an intended function of Google + (you can now store larger, smaller images if you have applied for Google +), but smaller, smaller images (800 x 800) are allowed without counting against the limit even if you are not interested in Google +.