Adobe Photoshop is a nice program, but it's expensive.
Adobe Photoshop CS is listed at $649.
Practically since I first started doing web pages, I've been using JASC's Paint Shop Pro. It's easy to use, does everything I need to do, costs a lot less.
Paint Shop Pro 9 will cost about $100. They also provide upgrade discounts for customers for about half the cost. I even remember one time they gave me the upgrade for free for being a 'valued' customer.
I would also recommend checking out the
Paint Shop Photo Album. I was checking this out for my mom. She needs a quick and easy way to publish 100's of racetrack photos to her site. This software allows for web gallery templates to be created using XML/XSL. So I can create custom templates that fit with her site, she can select which ones, make any adjustments and within a couple minutes, an html gallery is created -- thumbnails, regular size images, and all the html pages. It's pretty slick.
Then as was mentioned, there is
GIMP and also
IRFANVIEW.
Another one I've read many good things about, but have yet to download, is Picasa, which was picked up by Google. They released
Picasa 2 and from what I've seen it looks good and easy enough to use (looking at the Product Tour).