Once you upload a set of photos, it locates the similar faces from the uploaded set and group it together. It asks you to confirm the groupings and correct if its necessary. Then you can assign a name tag for the photograph and u can browse the album of that individual on the fly.
Mike Horowitz, Google Picasa product manager said,
The “name tag” feature presents users with collections of photos with what it judges to be the same person, then lets them click a button to affix a name. “Once you’ve started naming people, we’ll start suggesting names for you based on similarity.”
I feel its reallly a great feature and as far as I know none of the web albums have this face recognition feature. Hope this feature will be extended in Google Image search and Gmail search as well.
Excellent job Guyz 😀