I wasted quite a few hours today figuring out how to restore some folders that have gone missing.
After installing Picasa, it did the face recognition and all. Then I moved some images from "Unnamed Person" to their respective owners' albums and deleted the Unnamed Person albums. Then I linked to Google contacts.
Somewhere during this process, some images have gone missing. Some folders were not shown anymore in the Folders list.
Funny, though, if I would search for these persons, the number of their photos in Picasa would come up right both in the search box and in the people organizer. But I could not get to them.
I tried adding files and folders manually, excluding and including them, changing folder monitoring preferences, turning on and off face recognition, and so on. None of it helped. Then I reinstalled and rescanned all the photos again and went through the ordeal of assigning the photos to people again.
However, the images from profiles would still not show in the albums nor in the folders list. Then I browsed through help forums and that was next to useless.
Finally, a tip from one of the forum questions, only somewhat related to what I was searching for, pointed me in the right direction (http://www.google.kg/support/forum/p/Picasa/thread?tid=5bd81d83e0134aed&hl=en). The move that did the magic was to turn on the "Small Pictures" in the View menu!
And there they were - all the people's profile images from pidgin directories. Phew!