Here are some third party tools that enable you to automatically assign locations to your photos in Google Earth:
KML2KML - Windows only. The Photo Track feature of this application allows you to arrange photos on track according to GeoEXIF or GPS data. Check out this example.
gpicsync - This enables you to automatically geocode pictures from your camera and GPS tracks.
HoudahGeo - Mac OS only. Assign photos to locations. You can also export you data to EXIF/XMP.
Additional tools - Robert Lipe has collected this list of photo geo taggers.
Of course you can manually assign locations to photos in Picasa and publish them to Earth. Learn more.