It amazes me in my travels how many people feel the NEED Photoshop for web development.  And, of course, they only use about 1% of its total capability.  It is true that years ago, it was the only game in town for Image creation and manipulation.  But not for a while now.  There are many free alternatives that suit the web developer much better.

My favorite for most tasks is Paint.NET.  It greatest feature is its price:  absolutely free!  It started life as a college project and was so successful, that it lives on as a great piece of Freeware development.  It is not Open Source, however.  Some of the other features include layering, filters, great image processing tools, alpha transparency, PNG, and many, many more.  All put together in a small, efficient package that is both easy to use and very powerful.  And hundreds of dollars less than Photoshop and lacking the disturbing Adobe trend toward spyware.  And as the name suggests, it is built on C#.NET, so I feel like I am supporting the community I am a part of.

If you need more, there is the GIMP project.  Much more complicated, far more powerful, still free, but not nearly as user friendly.  It resembles Photoshop in many ways, including the powerful plug-in model that PS uses.  I use GIMP 2.2 for things I cannot do in Paint.NET, which really isn't very often. 

You know, between the two, I don't at all miss the copy of PS I had at my last job.  Not at all.  Of course, I am not a graphic designer or a heavy Photographer either that needs the power of PS, but I haven't worked with many people who really were either.

One last note.  For those that have been heard to say, "[MS] Paint is good enough.":  Do yourself a favor and get Paint.NET.  MSPaint hasn't been good enough since the '90s.