Upload plugin-name.php and the langauges folder to the /wp-content/plugins/ directory
Activate the plugin through the 'Plugins' menu in WordPress
Go to Presentation -> Widgets and add the widget to your sidebar
Adjust position of the widget on the sidebar (optional)
Click 'Edit' next to configure the widget:
1.1. Enter the url of the Picasa RSS feed
1.1. Enter an optional widget title
1.1. Enter the number of images you want the widget to display
1.1. Check 'Randomize Images' if you, yes you guessed it, want the widget to display random images from the feed