Every time we write about this package we have to apologise for its name. It's actually short for GNU Image Manipulation Program, a hint to its open source origins, and it's a free photo editor that can do (almost) everything Photoshop can without the price tag.
GIMP isn't just for photos, of course – if you're looking to create a logo, resize images for the web, or do any kind of image manipulation it's precisely the sort of tool you'll want to have on hand. It handles layers, masks, paths and numerous gilders with aplomb.
One recommendation, though: the default multi-window mode can be a bit jarring, so switching to single-window (pictured) is well worth your time and gives a much more Photoshop-esque feel.