The image size that you choose to upload photos to Picasa or Google+ does affect the quality of the image you store online. Smaller image size costs you a reduced image quality. While uploading photos to Picasa you must remember that the size which you upload is the largest size at which your photo can be downloaded. Picasa provides you the option to retain / preserve image quality for smaller size image upload. This means that when you upload a smaller sized JPEG image to Picasa, it uses the quality settings of the original image to maximize image quality at the smaller resolution.
To preserve the original image quality for photos that you upload to Picasa, do the following: