When you first install Picasa, it asks if you want to scan your entire computer or just your My Documents folder for pictures. If you select one option but change your mind, you can add more folders or subtract folders to the Picasa index by doing the following:

1. Click on FILE

2. Click on Add Folders to Picasa

3. Select a file then click on the "Always Scan" bullet at the side.

4. Click OK and it will scan all the given folders for photos.