I just recently discovered the capability of the collage feature from Picasa, and I'm loving it! I've been using it for collage boards for clients. The collage feature allows you to move, resize, rotate, and change the order of photos. I can mix photos I've saved from various websites with actual photos I've taken. I can use the eyedropper thingy (I really don't know what that's called!) to make my background match a paint color exactly.
Here's a project I'm currently buried in:
I've created this collage to help envision the sofa, chair fabric, area rug, wall paint, and floor with various accent pillow options that will help keep the space lighter and more playful. I'll add accent tables and other accessories as we get further along in the process (oh yes, after you've created a collage you can edit it and add more photos!)