Google is indeed working on the broken Picasa Web Album iPhoto plug-in

They could do a better job of communication, but Google's photo sharing site has apparently not abandoned their OS X (iPhoto) customer base:

Picasa web albums: not for OS X

... A Google Picasa [web album] developer commented ... The good news is that he's actively working on an update that will announced on the Google Mac blog....

Update 10/15/07: It took two months and Google never changed their download page to notify users it didn't work, but the new version is out.