Another cool photo editor: Phixr

Phixr is a FREE photo editor that let's you resize, recolor, crop, overlay another photo, and pretty much do anything else you can think of to photos you upload. It even has red-eye reduction! It's easy to use AAAAAAAAAAAAND you don't have to download anything. You can do it all from the web.

In addition, when you're finished tinkering, you can upload your newly-doctored creation directly to your flickr account. (it also supports upload to photobucket, livejournal, & a few others)

The only real drawback is that it requires registration (annoying), but it's still probably the best free editor I've seen that doesn't require download (like Irfanview).