I have a smattering of experience customising templates for Google's Picasa Photo-gallery. If you already know some HTML and CSS then you should not have too much trouble getting a basic gallery going, with thumbnails linking to fullsize images.
I don't claim that what follows is a comprehensive guide to Picasa and templates - but no-one else on the web seems to say very much about the subject, so even my modest contribution might help to get you running. I was using Picasa 2.7 on Windows XPP. See inspirational yoga photos.
If you haven't already done so, then create a folder in Picasa containing the images that you want to publish. I tried drag-and-drop to no avail, so do this with File > Add Folder to Picasa. After a few moments thinking, Picasa will show you little thumbnails in its own interface (ie not in a web browser). You can double-click on a thumbnail and replace "Make a caption!" with, well, a caption, of course. This text will get exported to your web gallery.
Tip: you can use HTML here, but be prepared that a) Picasa automatically applies smart quotes which are not good HTML - you can insert regular quotes if you Copy a quote character in a text editor, then go back to Picasa and use Control-V to Paste it in. b) Your caption will be applied in to HTML TITLE values, so if you have something like <A HREF="www.example.com"> in a caption, this will spoil your TITLE, and you may have to manually edit it out of a page.
Even if you have not yet created a template, you can get a quick feel of the process as follows:
That's it! You are the proud owner of a web image gallery which you can upload via FTP to your website.
Here's the point where (if you are like me) you want to roll up your sleeves and get your hands dirty with some customisation of the look and feel. Use Windows Explorer to find the Picasa templates folder, which is something resembling C:\Program Files\Picasa2\web\templates. You will see one folder devoted to each template or theme. In my installation (as of v 2.7, 2008) there are a pair of folder for three colour backgrounds: black, grey and white. One member of the pair is devoted to a 2-page system, where you have an index page of all the thumbnails, and can click on a thumbnail to show a new page with the large-size image. The other member of the pair is for a frame system: the thumbnails show in a tall scrollable column down the left-hand side, and you click one to show the large-size image at right, on the same page. I am not a big fan of frames though I wouldn't want to marshall a strong argument against them in this case. Suffice it to say, the rest of this discussion is based on the two-page template, but it should help you even if you adopt the frame system.
Pick an existing folder and copy and paste the folder to a new name of your choice, say "Fluffy Photos". Work there from now on, using a standard text editor (not Microsoft Word or other fancy app). (I greatly recommend UltraEdit.) For the two-page system, there are two ".tpl" files; index.tpl which supervises the thumbnail page, and imagetarget.tpl, which supervises the pages that hold your full-size images. Call these the target pages.
Tip: Sometimes I found that Picasa did not replace the folder with new contents. This happened for 2 reasons: 1) I had opened a file in that folder in my text editor to make some trial and error changes to the result CSS, for example. 2) I clicked the template option so quickly that Picasa had not had time to delete and re-create the folder before it was required to fill the folder with new results.
Tip: I wanted my result files to be PHP and not HTML, so that I could include some PHP code. At first I manually renamed the result files, until I realised that Picasa had a good option for me. In each of the two .tpl files, there are lines which define the output filename pattern, viz:
define exportFileName index.html and
define exportFileName target.html.
I simply changed these lines to use a .PHP extension instead.
You will find some succinct reference information about the internal variables (such as itemWidth and isNextTarget) in the short file supplied in your installation, typically: C:\Program Files\Picasa2\web\documentation\index.html.