Open Source Photoshop Alternatives
Most new web designers will not have a lot money to spend on software so Open Source is the way to go.
Why not try a FREE program that will do almost everything that Photoshop can?
Gimp
GIMP is the GNU Image Manipulation Program. It is a freely distributed piece of software for such tasks as photo retouching, image composition and image authoring. It works on many operating systems, in many languages
Kritna
Krita is a graphics application for everyone who wants to get creative with images. Whether you want to create from scratch or work with existing images, Krita is meant for you.
Picnik
Picnik makes your photos fabulous with easy to use yet powerful editing tools. Tweak to your heart’s content, then get creative with oodles of effects, fonts, shapes, and frames.
Splashup
Splashup, formerly Fauxto, is a powerful editing tool and photo manager. With the features professionals use and novices want, it’s easy to use, works in real-time and allows you to edit many images at once. Splashup runs in all browsers, integrates seamlessly with top photo-sharing sites, and even has its own file format so you can save your work in progress.
Adobe Photoshop Express
Adobe Photoshop Express is a Flash-based image editing web application from Adobe used to directly edit photos on blogs and social networking sites, so that users do not have to download or upload images. Similar to Picnik, the application currently works with sites such as Facebook, Flickr, Picasa and Photobucket.

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Hey Jim…good timing on this post. As you noticed, I killed my old WP theme to come up with something more customized & original. I had GIMP installed on my computer for at least a year but would get overwhelmed everytime I opened it and saw all the menu options. Guess I just needed a real reason to motivate me into learning it.
It was pretty easy to find GIMP tutorials on the web that showed me how to install and use brushes & layering to come up with something for my new header image. I’d never used Photoshop or anything like it so it tells me if I can do it, anyone can! Now I’m interested in finding what other cool projects I can use GIMP for. :)
@Coree : The power of a tool like GIMP is amazing. Photoshop too. I happen to use PS myself, but I have paid for it. Ouch.
And once you understand layering, you are all set. If you have a mind for it, I am not good with PS, but pretty decent with code :)