Picnik is a free, flash-based, online image editor. You can add all sorts of amazing edits to images (I use it for editing screenshots) and its free.
Google bought them in 2010. They've even integrated Picnik into Picasa, Google's answer to Yahoo's Flickr, so you can edit images right in the browser.
To make editing screenshots in Picnik easier, you can also download the Picnik extension for Google Chrome. It puts a shortcut button in Chrome. When you're on a page of which you want a screenshot, click the button and it will take the screenshot right into Picnik.
