By default, Picasa3 stores the name/face tags in the hidden .picasa.ini file located in the folder where the picture is stored on your hard disk (your computer). When tags are stored only in the .picasa.ini file, the tags are only visible using Picasa. If you want tags to attach themselves inside the photo, you can choose to let Picasa store the face tag information inside the metadata of .jpg files. We suggest setting that up as follows.
Start Picasa
Go to Tools > Options in the menu.
On the Name Tags tab, place a check mark by the Store name tags in photo option.
When you have this option checked, any new faces that you tag will be stored inside the photo in the standard XMP Metadata section. This does not affect existing face tags.
Setting the previous option only assures that all future name tags are added into the XMP metadata section. To have all previously existing face tags saved in the metadata of .jpg files, follow these directions (use at your own risk as this feature is "experimental"):
In Picasa, go to Tools > Experimental > Write faces to XMP
Choose "Write Faces" (other options are "Write Selected; "Write All"; "Cancel")
Write Faces or Write All may take a long time. If logging is set to detailed or higher, network.log will contain messages about read-only files which could not be updated. Signing out is recommend while using this feature.
Take a break from Picasa and let Write Faces feature do it's work.
Other help pages:
How to use name tags and the face recognition feature of Picasa3