@Lars: It would be nice to have a similar workaround on a Mac, since I do not use windows as my primary computing environment anymore. If I find anything I’ll post it here.

With jpeglosslessrotator installed (on Windows) the work-around is quite easy
(perhaps my translation from swedish commands isn´t 100%):

When you in Picasa find a photo that needs to be (lossless) rotated:
Right-Click it – Find on disk (or use Ctrl+Enter)
When the folder/photo has opened in Explorer:
Right-Click it (you can first select as many photos as you want to rotate)
Select Rotate clockwise or counter clockwise (the command that jpeglosslessrotator installed in Windows right-click menu).
Close the window and go back to Picasa that is automatically updated and showing the photo(s) as you rotated them.

I think this work around works quite well but of course it would be even better if it was integrated in Picasa.

I know you’re on a Mac, but look at this software and try to find an equivalent:
http://annystudio.com/software/jpeglosslessrotator/

Note: Even “lossless” JPEG rotation can degrade quality at the edges. See this explanation:
http://www.betterjpeg.com/lossless-rotation.htm

I would love to find a Picasa replacement, but except for these issues with rotating, Picasa is the best that I have found. So I live with the compromise of rotating before with another tool (either my camera or with Adobe Bridge) and then import to Picasa.

Every cam or mobile phone does 1), and all common free image organizars _exept_ Picasa do 2), some do both.

I start to sense that this sacred preservation of the original is something for pro photographers, but for average amateur pictures like mine it’s not that important. Picasa should at least have the option and warn you about it.

BTW, I have read that there is a way to rotate a JPG picture without any lost of quality at all, but the picture’s size must be a multiple of 16 o 8 or something like that. Most standard pictures resolutions today comply with this, so I don’t see why not making these applications use that algorithm.

The problem here is not with Picasa, actually–it’s with your camera. Just about every digital camera since 5 years ago has included an auto-rotation feature that uses sensors in the camera at the time the shutter is released to determine orientation–that should be stored in the RAW file and correctly reflected automatically. On occasion if you’re moving the camera during the exposure or shooting straight up or down it might get it wrong, in which case you need to deal with it manually…but unless you specialize in those kind of shooting techniques, shouldn’t be a problem 99% of the time.