I am a huge digital photographer. When most poeple take 1 photo, I take 13. My philosophy is take a ton and pick the best one. Honestly, I have gigs and gigs of photos. Long ago I used to try to label them by activity or subject, but I would have problems - duplicate filenames - or my biggest problem which was I download my pictures and label them 'joe's wedding' in the download tool, but yet it had pictures of playing in the pool on it too, so now those pictures are mislabeled by the filename and going through and constantly changing filenames didn't appeal to me, besides I find sort order is important. So I've settled into my current scheme and it works really well for me.
I have a 'My pictures' folder (its on its own disk, I need lots of space)
In that folder, I have a folder for each year. In each year folder, I have a folder for each month, labelled so they will sort appropriately (01January, 02February, 03March, etc)
The photos themselves when I download from my camera I give them a filename of the date they were downloaded in an order so that they sort correctly Year-Month-Day and then the utility assigns a number to the specific picture. I do this because it guarantees me the filename will be completely unique and I won't have two 'christmas 007.jpg' that I accidentally overwrite. I download the camera fairly frequently, so the date of download is close to the date the picture was taken. Windows has a field for 'date picture taken' so if I want to get that specific the information is there and I'll use that field to sort by when I want the pictures in order.
Every so often (I would like it to be once a month, but I get behind) I go through my pictures and put the best up on my website to share with friends and family. I edit them (I then save the file with "edited" appended to the filename) and make smaller versions (all my originals are huge - 2-3MB each) labelled with a sm_ appended to the front of the filename which I put up on my website in a similar year / month organization.
I have tried google picasa, but honestly I just have too many pictures - and they are all so big it just doesn't work well. I find I have no problem remembering when something happened so I go to the rough date if I want a picture of that event and/or I just scan through the different folders if I'm just looking for a cute picture of my daughter for a craft project, etc.