Recently I have been experimenting with Paint.Net. Paint.net is a free photo editing package which is a step above the basic editors that are available. It has layers and many of the options of Photoshop. It was developed as an university project and continues to be supported. If you already have .net on your computer it is a download of less than 4 meg, with .net it is 46meg. Paint.Net is only available for Windows. See getpaint.net for more info and downloads.
I found Paint.net to be a reasonable editor but not in the same class as Photoshop or the Gimp. While it handle the basic edits well some of the screens were not as user friendly as I was expecting. The auto fixes achieved a similar result as Photoshop Elements which suggests the internal routines are well written.
I have been using Photoshop Elements 4 too. I found it simple to use and effective for most uses. The photo organiser has not been used extensively but I found it more powerful than Google’s free Picasa.
So what was my final decision. While Photoshop is the industry standard there is no doubt for most people one of the free options will provide most if not all of the tools required to edit photos and create works of art. There are of course commercial options. Photoshop Elements is a useful package that uses the Photoshop engine with a simplified interface and options. It includes the most popular options but without the more powerful tools. Another popular editor is Paint Shop Pro. I have used an older version and found it very useful and it deservedly has many fans.
But none of the commercial packages have a great advantage over the free options except in one area. None of the free software mentioned above can handle camera raw. For that you need the software supplied with the camera, a specialised program such as RawStudio or you will need to spend money. Photoshop, Photoshop Elements and Paint Shop Pro handle a varying range of Camera Raw. If this is important to you confirm your camera is covered before you put your money down.
If you intend to work professionally there is no substitute for Photoshop but most users will never use 90% of Photoshop’s power. I use the Gimp most of my editing. Give the free software a try, after all what can you lose it won’t cost you anything.