Google has always offered the option to purchase additional storage for your Picasa account, however, now that purchased storage is for more than just your Picasa account. Google has started a new shared storage program in which your paid storage can be used across other Google services. For now, the only two options are Gmail and Picasa, but I’m sure Google intends to add additional services to the list like Google Docs & Spreadsheets.
I don’t have any purchased storage through Google, so the screenshot below is from Google Blogoscoped. It shows what your storage screen will look like if you have the additional storage to share across other Google services:
The announcement on the Official Google Blog when talking about the new shared storage says, “That will help make storage really useful, like letting you upload lots of full resolution images to Picasa Web Albums.” If you were to reach the limit for either your Gmail or Picasa Web Albums account, the paid storage is then your “overflow solution” and will be used on a first come first serve basis.
In the future, it would be nice if you could share even the basic free storage, but I don’t see that as something Google would implement. If you’re interested in purchasing additional storage, you can find the details here. It starts at 6GB for $20/year, and goes up to 250 GB for $500/year. You can also see how much storage you’re currently using here.