I have tons of experience with all kinds of software, but must admit I was simply stumped by photo editing softwares. I ultimately decided to go down the road of the various Photoshop routes for the simple reason that it was something so many know quite well, and it would be easy for me to learn by asking.
Adobe makes a very good product called Photoshop Elements. The word Elements connotates that it is their entry level product, but I have to admit that it really includes a lot of features that are good enough even for most intermediate users. It is a very good software, and best of all it has been around for several generations. I think they're up to PS Elements 4 now. There are a lot of free versions available when you buy other products (such as printers) and you can find it on Amazon (their 3rd-party retailers) for around $50.
Apparently there is a free software out there called Gimp, and if you're really into it you can even install a skin that will make it look like PS. Also worth looking at.