Redeye removes the bright red eyes that occur when taking pictures with a flash.
To remove redeye from pictures:
Click the Redeye button in Basic Fixes.
Click and drag a rectangle around the red area.
Repeat as needed for other red eyes.
When you are finished, click Apply.
Note that when you fix redeye, Picasa copies the original file to a folder called "Originals" and puts the fixed picture in its place.
This feature works only on JPEG files.