For everyday image-tweaking chores--cropping, resizing, and the like--I use IrfanView, one of my all-time favorite freeware apps.
But when I need drawing tools and other advanced capabilities, nothing beats Paint.NET. Don't let the Web-oriented name fool you: this is a powerful image-editing program, one stuffed with Photoshop-quality features like layers, special effects, and plug-ins. Best of all, it's absolutely free.
Consequently, I think it's a no-brainer for any user looking to edit, enhance, and otherwise modify images without spending crazy bucks on Photoshop.
The just-released 3.5 version of Paint.NET adds an updated user interface, new effects, improved startup performance, and a long list of tweaks and fixes. To use it, you'll need Windows XP, Vista, or 7, and Microsoft's .NET Framework 3.5.
I'm perpetually amazed that you can get software this powerful that doesn't cost a dime. Bottom line: If you want to edit images, get Paint.NET.