"Select the 'Require sign-in to view' option to set the highest level of privacy for your album -- you specify who has permission to view it, and visitors must sign in to their Google Account to verify their identity. Anyone not included on the album's 'Shared with' access list will be unable to view the album," details the help page.
The access list is displayed in the album's sidebar and you can add or remove people from that list at any time. The only problem is that your friends need to have Google accounts to validate their identity and access the album.
Until now the only alternative to making the album public was to make it unlisted, but the album still had a web address that allowed anyone who knew it to view your album. If you try to view an album that has the new visibility option enabled, you'll get this error message:
Since you now have three levels of visibility and it's difficult to remember which albums are unlisted or private, Picasa Web Albums' homepage displays the access setting next to each album using an icon.
{ Thanks, Michael. }