It seems like the in-program editing is superficial in that if you edit a photo and then put the photo anywhere, the editing won’t come with it. How do you save the photo into a version with the edits?
Are you exporting the photos? There’s an “Export” button at the bottom of the edit screen. You can export several photos at once by using the “Hold” button to hold them in the tray, then clicking Export to do them all as a batch. This will create a new folder for the photos under My Pictures/Picasa Exports.
Once you have made changes and return to the library, you can also click the Save Changes button to save the changes in the original folder.
The point of Picasa is that it preserves the original photograph. Any edits you make are remembered, but only in the context of Picasa itself - it doesn’t touch the source file. Thus you need to export, as described above, to reflect any changes.
You can also make the changes stick by saving the pictures, in which case Picasa will make a hidden backup of the original and save the picture with all changes applied.
The originals are moved into a hidden subfolder called “Originals” that have identical names to the changed files, which are kept in the source directory. So all you need to do is go delete the “Originals” folder and the changes should be permanent.