Firstly, launch Picasa, navigate to Tools menu and click the Options button. Select File Types and check the boxes next to the RAW formats. Picasa supports only the following RAW files:
- Adobe (.DNG)
- Canon (.CRW, .CR2)
- Casio (.RAW)
- Fuji (.RAF)
- Hasselblad (.3FR)
- Kodak (.DCR, .KDC)
- Leica (.DNG, .RAW)
- Minolta (.MRW)
- Nikon (.NEF, .NRW)
- Olympus (.ORF)
- Panasonic (.RAW, .RW2)
- Pentax (.PEF)
- Ricoh (.DNG)
- Samsung (.DNG)
- Sigma (.X3F)
- Sony (.ARW, .SRF, .SR2)
If this doesn't help, update the program to the latest version.