on mine the pop up reads a little bit different.

right click on picture pop up says-
view image
copy image
copy image location
save image
send image as

and a couple other options - on your computer screen it may be worded a little different also.

my picasa must be set up different - cause all my photos stay in the my pictures section of my documents and the picasa just finds them when I open it to do any editing or adjusting of them.
But it is acting odd lately finds the pictures but they don't open/show- so I may have to reinstall it.