I finally Googled to find an answer to this simple problem, which is:
When you load pictures in Picasa, it cleverly rotates them the correct way. However, Picasa does not change the underlying originals (look at them with Windows Explorer if you don’t believe me). So when you synch or stream these pictures on your Apple TV you’ll see the audience’s heads turn to one side in unison every so often, to view a sideways picture. The solution is simple, and is recorded at Google’s support site: click in the folder of pics you want to view on your Apple TV, then click the ‘save edited photos to disk’ icon, which looks like a diskette – just to the left of the ‘share’ button.
This has saved me a ton of time compared to having to rotate the images manually. Why didn’t I research this earlier?