You can't currently rename photos using your Xoom or organize them into folders, at least not without a third-party app. You can perform these tasks at your computer and transfer the newly organized photos back to your Xoom. If you're up for it, I suggest you remove all the photos currently stored on your Xoom, including pictures you've taken with the Xoom's camera, put them in a folder on your computer, organize those photos and rename them as desired, and then copy them back to your Xoom. Likewise, you can reorganize the photos you synced to Picasa and resync them. If you do this, the Gallery will be much more organized.
WHERE ARE THE PHOTOS I TOOK USING MY XOOM CAMERA? The photos you take with your Xoom are in the DCIM folder, in the Camera subfolder. You can drill into this folder while it's connected to your computer to access the photos to organize or rename them, or you can browse here using a third-party app you've installed on your Xoom to perform maintenance tasks.
The photos you take with the Xoom's Camera app are assigned generic names such as IMG_20110321_094859. If you want to rename them, and you don't have a third-party app to help you, you can rename them from your computer.
To rename a photo using your computer (instructions here are for a Windows-based PC), follow these steps: