Radeon HD 2600XT, 512mb
Yeah when I view an image it opens fullscreen (default, with a trans gray type overlay), then the cursor changes to the move cursor and completely locks up my system, pegging out my CPU. The only way to fix it is to kill the process and change back to the default Windows cursor. It also happened again today when my mom was browsing something that used Google Maps (or some other map thing). I've had to completely disable the program now to avoid it locking up again. 
It doesn't happen with the main Picasa program, only the photo viewer.