Photo collections should be stored in normal folders just like any other electronic file and backed up just like any other electronic file. All metadata should go with the file either embedded, if you use JPGs, or in an associated XMP file if you use RAW files.
Picassa, Lightroom, Elements, Photoshop, ... these are just tools. Tools that are present now but may at any time not be available. Use Picassa to find faces in images but ensure that all tags are stored with the file not just in a database somewhere that only Picassa can access.
What would happen if a program stopped being made or your database corrupted? Essentially you loose hundreds of hours of work. If the metadata is embedded with the images all you need to do is open the new program you have found (say for example digiKam if you get into Open Source alternatives), point it at the main image directory and BANG all you data is back again!
The trick is to ensure that all the data you have about your images is stored in standard metadata format and all you images are stored in a logical fashion. Don't worry so much about the primary organization, your tags will allow whatever Digital Asset Managament (DAM) System you use to find that file you are after.