I'll echo the recommendation for Paint Shop Pro. I've been keeping mine up-to-date since I first downloaded it in it's early shareware days...shortly after I evolved opposable thumbs. I hear-tell it's the most downloaded photo/graphics program in Internet history.
PSP gives you a lot of power for your money. It has all the basic tools, some automatic wizards, special effects filters, and other neat features, plus, it takes PS plugins. I should also mention that PSP9 now supports Canon RAW (.CR2) files.
One day, in the far-flung future, I suppose I'll buy Photoshop...I mean, after all, it's Photoshop. But until then, PSP is nothing to sneeze at.