In 2007 Google added an option to pay for additional storage for Gmail and Picasa Web. The prices have changed since then: for $20/year you get 10 GB instead of 6 GB, for $75/year you get 40 GB from 25 GB, for $250/year you get 150 GB instead of 100 GB and $500/year is the price for 400 GB, up from 250 GB.
Google's offer doesn't look very good if you compare it with the storage offered by Yahoo Mail and Flickr. Yahoo Mail promises to offer "unlimited storage" if you don't abuse the system. "The purpose of unlimited mail isn't to provide an online storage warehouse. Usage that suggests this approach gets flagged by our anti-abuse measures."
Flickr is less generous: you can only upload 100 MB of photos each month if you have a free account. Picasa Web Albums offers 1 GB of storage for free, but a Flickr Pro account costs $25/year and you get "unlimited storage".
Google's offer would make sense if you could use the storage in a service like GDrive, but uploading photos and storing more attachments in Gmail is not enough. There's no defined limit for uploading videos at Google Video, but you need to pay if you want more than 1 GB of storage at Picasa Web Albums.
Google offers a way to purchase more storage space to use with some of its products (currently Gmail and Picasa Web Albums). This extra storage acts as overflow when you run out of free storage space in either product. If you've filled your free storage (57.2 GB and counting for Gmail or 1 GB for Picasa Web Albums), you'll automatically use your purchased space to store more pictures and messages up to your new storage limit.
Your shared storage space will be used by whatever product needs it. Picasa's free storage is for photos only, and Gmail's is just for Gmail messages, but the shared storage can be all photos, all messages, or a mix of both. You can't set aside shared storage space for one product - it will be used by any product that's over its free storage quota on a first-come, first-served basis.
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