I prefer Picasa (actually Aperture or Lightroom are better, but not free of course).
iPhoto does integrate better with some other applications, but you can use both. I put my photos into iPhoto, but when I work or them or use them I use Picasa instead. iPhoto justs sits there, unused, but since other applications look into the iPhoto Library, it's all good.
The latest iPhoto is particularly horrible, IMHO. They fixed some of the stuff we were complaining about, but I'd suggest saving some $$ of the money you'd spend on iLife (and I guess iWeb is on the ropes) and save toward Aperture.
Meanwhiie, Picasa is great. Especially with tags; iPhoto has it's own scheme for keywords, but Picasa plays well with other tagging applications like Tags or Leap (IPCT tagging). It also delves into the semi-hidden library structure of iPhoto, which means you can use it when you want to use applications that don't necessarily play well with iPhoto. So you get the best of both worlds.