Does Google Picasa store metadata in the pictures?

I just tried this with Picasa 3.5.1, and the results were disturbing. In Picasa I changed the caption of a JPEG image from a Pentax K20D camera, then took a look at the file with a metadata utility to see what had been changed. Here is what I found: The caption was written to the IPTC Caption-Abstract. All maker note information was COMPLETELY DELETED! (So all information about camera-specific settings is lost.) The byte order of the EXIF was changed from big-endian to little-endian! (Which goes against the current http://www.metadataworkinggroup.org/.) The EXIF software tag was changed! (From "K20D Ver 1.00" to "Picasa 3.0".) An EXIF ImageUniqueID tag was added. So beware if you use Picasa to edit metadata.

No, Picasa stores all metadata information in a database. From the Google Picasa Help pages http://picasa.google.com/support/bin/answer.py?hl=en&answer=11502: If you notice oddities in the appearance and placement of your photos within Picasa, you may need to rebuild your Picasa database. For each photo, the Picasa database keeps record of the following information: Location of the files Unsaved edits made to them Album organization Previews of the images and http://picasa.google.com/support/bin/answer.py?answer=11021: Saving Edits: Saving photos Picasa is designed to keep your original photos safe when you save your photo edits. This is done by creating a new JPEG file that's a copy of the original with your edits applied. The original photo is never altered, but depending on how you save the file, its location on your hard drive may change.

Picasa stores its Caption and tags in the IPTC metadata of the jpg, and the GPS location information in the EXIF metadata. Try using Irfanview to look at the properties of any jpg that you have tagged and located.

The answers here that say that Picasa only stores metadata in its internal database and never in the image files are wrong. Picasa stores some metadata in both its own internal database, and in the image files themselves. As others have pointed out, its handling of image metadata leaves much to be desired. For example, Picasa 3.5 only supports IPTC metadata to the legacy IPTC-IIM standard. That standard was frozen in 1997. Picasa 3.5 does not yet support the preferred http://www.iptc.org/cms/site/index.html;jsessionid=aYPycim3D6S%5F?channel=CH0089, based on XMP. The IPTC Core standard was introduced in 2004. Five years on, and Picasa still hasn't caught up to the fact.