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If you can't afford to purchase software, you can still find free software to create and edit images. Some of this software is developed by individuals, and some is feature limited or an earlier version of a more advanced program. In some rare instances, there are no strings attached, but most often you will need to provide information to the company by registering, or endure ads or "nag" screens.
1) GIMP for Windows - http://www.gimp.org/windows/
GIMP is a popular open-source image editor originally developed for Unix/Linux. Often lauded as the "free Photoshop," it does have an interface and features similar to Photoshop. Because it's volunteer-developed beta software, stability and frequency of updates could be an issue; however, many happy users report using GIMP for Windows without significant problems. It doesn't support GIF format.
Publisher's Site - http://www.gimp.org/windows/
2) Serif PhotoPlus - http://www.freeserifsoftware.com/
Serif has long been giving away previous versions of their software to entice users to purchase the current version. Currently you can download a completely free, fully-functional version of PhotoPlus 5.5, or order a CD and pay only shipping costs. PhotoPlus 5.5 features an export optimizer, editable text, image slicing and image maps, selection tools, smart shapes, and image enhancement tools.
Publisher's Site - http://www.freeserifsoftware.com/
3) Pixia - http://park18.wakwak.com/~pixia/
This is the English version of a popular free painting and retouching software that originated in Japan. It features custom brush tips, multiple layers, masking, vector- and bitmap-based drawing tools, color, tone, and lighting adjustments, and multiple undo/redo. Like many freeware editors, there is no support for saving GIF format. Also available for many other languages.
Publisher's Site - http://park18.wakwak.com/~pixia/
4) Ultimate Paint - http://www.ultimatepaint.com/
Ultimate Paint is available in both shareware and freeware versions for image creation, viewing, and manipulation. It has been designed to be fast and compact, and if you're familiar with the old Deluxe Paint program from Electronic Arts, Ultimate Paint is said to be very similar. The freeware version is an older release of the full-featured shareware product.
Publisher's Site - http://www.ultimatepaint.com/
5) PhotoFiltre - http://page-antonio.chez.tiscali.fr/news_en.php
Although it's fairly limited in features, PhotoFiltre offers a simple, but elegant user interface and a lot of one-click image adjustments, filters, and effects. There is a built in image explorer panel for visually navigating your file system, basic drawing, painting, retouching and selection tools, and batch processing capabilities. Unfortunately, without layers or transparency support, it's not very useful for much more than playing around with filters and simple adjustments.
Publisher's Site - http://page-antonio.chez.tiscali.fr/news_en.php
6) VCW VicMan's Photo Editor - http://www.vicman.net/vcwphoto/index.htm
This award-winning graphic editor offers a variety of painting and editing tools and features including a text tool, gradients, selections by color or region, color replacement, editing in any scale, special effects and so on. This free version is an enticement to upgrade to the Pro version for $29.95 US, so you can expect to put up with nag screens.
Publisher's Site - http://www.vicman.net/vcwphoto/index.htm
7) ImageForge - http://www.cursorarts.com/ca_imffw.html
ImageForge is a freeware image editor with painting and editing tools. Allows you to import images from scanners and digital cameras, apply special effects filters, and create photo albums and slideshows. Although this is teaser program for the shareware ImageForge PRO, it's probably a few steps above M*cro$oft Paint.
Publisher's Site - http://www.cursorarts.com/ca_imffw.html