Quote:
Originally Posted by blue_pinky
Or...there's a free open source package...
http://www.gimp.org/
Stands for "GNU Image Manipulation Program" and isn't as dodgy as it sounds, so don't worry about where the link takes you!!!
I've heard good things about it, but since I've always had access to photoshop I've not needed to try it, not sure how easy it is to use, but it is free, and will probably stay that way...so maybe worth a look for anyone wanting a play! 
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That's what I used. From my own experiences, I would say that while Photoshop is better for handling large, photographic images, GIMP is if anything more suited to icons, avatars, banners, textures etc. For example, I recently discovered a cool flame effect in it using Difference Clouds or Solid Noise filters - set 'X size' high and 'Y size low', then Colourise it, and you end up with something like this: