The cat is out of the bag. Google has come up with picase web. Its in beta and currently has 250MB space for a user. Again as with gmail, its based on invitation based sign up.
Good thing is that Picasa desktop application is linked with the online web album. That is the coolest feature I think. So I just right-click on the photo in my desktop and say upload. It uploads on an album of my choice on the web. I think flickr cannot do this 🙂
Here is my first album in Picasa web – Life @ Hyd
So I’m not going to flickr 🙂