In regards to ISO, I would never leave mine on auto. We usually run into trouble when we let our equipment do the thinking for us! I almost always shoot in Aperture Priority on location, and set my aperture as wide as possible for my subject (widest for individual subjects and smaller for multiple subjects in order to keep everyone's eyes in focus). Then I increase my ISO just enough to allow me to shoot fast enough to freeze any action that's going on.

For glass-like eyes, you first need to have the eyes in perfect focus in-camera. That means perfecting your focusing technique, and then the edit can really make them look sharp and lovely without too much work. I usually just apply Smart Sharpen in Photoshop CS3 (I don't know what sharpening options are available in Picasa and I don't think that PS 7 has Smart Sharpen, but I'm not sure). I sometimes brighten the eyes just a little bit.

I always sharpen and brighten the EYES ONLY. For portraits, we want the rest of the image to stay soft.

In fact, for this photo, I specifically set aside my D-SLR camera in order to capture this demonstration picture for my BetterPhoto online classes. My goal was to show that, yes indeed, you can achieve a selective-focus effect (i.e., narrow Depth of Field with foreground sharp and background blurred) with a non-SLR digital camera! The approach:

I used both a telephoto focal length and the camera's largest aperture (lowest f/number). I also focused as close as possible on the foreground subject and I also made sure there was a very distant background. Often, shallow-DOF discussions center on just the f/stop, but extreme closeness to the foreground subject, great distance between foreground and background, and telephoto view are keys to selective-focus success too!

BTW, this photo was shot on the property of my country home - at my collection of broken-down old ranching/farming equipment :-)