For those who can't afford the ubiquitous Photoshop, welcome to the world of GIMP (acronym for GNU Image Manipulation Program)
This program allows you to do most, if not all, of what you can do with comparable programs costing hundreds of dollars.
The GIMP is a freely distributed piece of software for such tasks as photo retouching, image composition and image authoring. You can resize images, feather edges, erase, fill, magnify, and select portions of your images using the lasso tool. You can also create layers and add text to your images.