Google Picasa Web Albums offers 1GB of free storage for photos and videos. Any photo and video will occupy that space and additional would cost you. Recently, Google made changes to how it calculates your storage quota usage.
Photos less than 800 pixels x 800 pixels and video less than 15 minutes long that are uploaded to Picasa Web Album, Blogger, or Buzz don’t count towards your storage quota. [ via picasa help ]
So, you can batch convert all your image collection to under 800 pixels and upload to picasa. For batch conversion – Use IrfanView or if you use Picasa Software, set Upload Size to Small (640 pixels) and no space is counted. For videos, you can cut them into number of pieces less then 15mins each.