I was having trouble with inserting pictures already uploaded in Picasa Web Albums into WordPress.com posts. But I’ve found a solution.
Problem occurred when I took the following steps:
1. I selected ‘Add an Image’ button from ‘Upload/Insert’ in my WordPress post.
2. I selected ‘From URL’ tab.
3. I copied the picture’s Link from ‘Link to this Photo’ in Picasa Web Albums.
4. I pasted it into the ‘Image URL’ box in WordPress.
5. A red cross appeared next to the ‘Image URL’ box, which meant WordPress didn’t like what I was doing for some reason, and the ‘Insert into Post’ button at the bottom was not possible to be clicked on.
(This applies to Windows XP)
Instead of Step 3 above, right-click on the picture > select ‘Copy Image Location’ > paste it into the ‘Image URL’ box in WordPress.