I posted this in another thread somewhere, but here's a list of both free/paid programs:
Online (Free):
Pixlr (Closest to Photoshop)
FotoFlexer
SplashUp
Best 3, i can recommend to you if you don't want to download any software.
Software (Free):
GIMP (Cross-platform, closest to Photoshop)
Paint.NET (Windows-only)
InkScape (Cross-platform)
Seashore (Mac-only)
Software (Paid):
Photoshop (Best thing, if you have the money to spend on it)
Pixelmator (Mac-only, like Photoshop)