It's this simple: Google's Picasa is the best free piece of photo managing and editing software you can find. What does it do? The better question to ask is what it doesn't. At its most basic, it's a photo manager and viewer. Fire up Picasa v3.8, and you can browse through all of your photos, organized by folder, as well as by the year they were stored on your hard disk.
When you first install the software, it scans your hard disk for photos. Normally, this can take a very long time, but Picasa goes about its business with remarkable speed, so you don't need to worry that you'll have to wait forever while it finishes. Even better: It displays the photos as it finds them so that you can immediately begin working on your photos even while Picasa adds new one. It's also a great file viewer, and you can use it instead of the one built into Windows.
But all that is just a start. It also has a full complement of editing tools, and lets you create CDs full of photos, as well as photo collages, screensavers, and posters. It will upload your files Google's Web albums photo site, publish your photos to your Blogger blog, and plenty more as well. Even if this were a for-pay program you'd want it. Given that it's free, any digital photographer will want to download it.
That's not to say that Picasa is perfect. There are countless features, and they're not all organized particularly well, so it can be confusing to use. But once you get the hang of it, you'll be amazed at its power.
Note that when you install Picasa, it makes Google your default search engine. If you don't want it to do that, make sure to uncheck the box next to that option when installing it.