Dastard.
I am not familiar with Photostream, hence my reply may not be germane.
However, I have been using all iterations of Picasa on my iMac and find not the slightest conflict with iPhoto.
Both apps have features the other lacks which is regrettable since the duplicated camera downloads eat up a lot of real estate. I solved that by installing an external drive dedicated to photos and movies.
It is unfortunate that the one feature absent in iPhoto that many users here are also seeking, is the adding of text to a photo. Thus I must import pictures into Picasa, do the editing AND adding of text, and then move them to iPhoto because of its superior Events file system. Of course this relates only to photos one actually wants to print out since one can always use captions when mailing them.
I would gladly pay for such a feature - free with Picasa - to help Apple with their profits.
Now I read that Korean has been added as a foreign language. Let's hope that one of our Asian friends will come up with a solution in this Forum which is sorely lacking attention in the Apple compound. I erroneously assumed it to be monitored by staff.
While I was still subscribed to Apple Care, I brought this question up but could never get it resolved - even after upgrading to Snow Leopard.