Does Google Picasa store metadata in the picture files?

"Picasa writes tags and captions in the IPTC block (that is in the image file) if the file format supports it.
http://picasa.google.com/support/bin/answer.py?hl=en&answer=15055

Since version 3 or so there is also a function to display an iptc tag as album.

(I used that myself and verified that it is actually using iptc via irfanview)"

"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 IPTC Core metadata standard, based on XMP. The IPTC Core standard was introduced in 2004. Five years on, and Picasa still hasn't caught up to the fact."