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I use Photoshop CS2, obviously you want an open source program......
Google Picasa is free but you are limited.
Serif give away previous versions of their software for free. This is good, as you can get Photoplus 6.
Gimp is a free image editing tool, which I havn't used before but it looks good in the screenshots.
Ultimate Paint is a good image editing program, reccomended by a lot of web design magazines etc... and they do a free version.
Paint.Net is a great free program that looks and feels like photoshop.
If you want a banner making program, try
Selteco Bannershop GIF animator, I don't personally use this, but it is easy to use and is only $39.00 (£22.00)
Hope this helps...
~seolio~