As of today, Picasa Web Albums users will be able to use Picnik's editing tools without ever leaving their accounts.
Google acquired Picnik back in March. While Picnik's free web app lacks the fuller features of tools like Aviary's Phoenix, its simplicity makes it an appropriate complement for online photo-sharing sites.
On Picnik's web app, users can crop and resize photos and adjust brightness, saturation, contrast and other attributes free of charge. The Picasa implementation will also let you add stickers, apply special effects and use advanced tools.
Edited photos can be saved as new images in your Picasa Web Album, or they can be used to replace the original image.
Here's an example of what the app will look like and what you can do with it:
Although Flickr is a Yahoo property, Flickr users are currently still able to use Picnik to edit images from within the Flickr app "in Picnik mode," as well. It's unclear whether users will lose this functionality, but such seems unlikely at this time.