Picasso96 is a more advanced replacement for the EGS software. Think of them as the same as video card drivers on Windows (ie. AMD Catalyst/nVidia).
You'll also find better software support for Picasso96 than for EGS. EGS has basic Workbench support and is mainly used to run its own desktop system and applications whereas Picasso96 provides great support for Workbench and normal Amiga applications.
