Not everyone can (or is willing to) plunk down a few Benjamins for Adobe Photoshop, so here are two great alternatives. GIMP (GNU Image Manipulation Program)
GIMP has a lot of power - almost as much as Photoshop itself. You'll be able to do many complex things with it, but the interface can be confusing. If you're familiar with Photoshop, there is a "GIMPshop" version available as well. And all this for the low, low cost of diddly squat!
Paint.NET
But if you're like me, you get confused by all that power. If all you need is to, say, shoop a guy's head onto a banana, Paint.NET's got you covered. It's got all the basics, like layers, transparency, and some effects. It's also Free!!!
Sure, you could pirate Photoshop (We do not condone or support doing so), but these guys get the job done without putting a hole through your wallet or you behind bars! 
