If you want to resize exported images you have to select any file format other than <Original> in the Import Dialog / File Setting / Image Format.
For web-use you would select JPG. Color space for web use is sRGB.
Selecting another format than <Original> will activate the <Image Sizing> and <Output Sharpening> sections of the Export Dialog.
Select a size appropriate for the Picasa Album and select a Quality Setting - between 70 and 80 should be fine; and select output sharpening for screen.
For sizes you can specify from several parameters. I find it most convenient to select 'Long Edge' or "Short Edge", specify the amount of pixels, and let the other edge fall according to the ratio of the image edges.
See screen shot: