For basic manipulations like contrast, gamma, brightness, saturation, colour balance, red eye reduction,... adjustments, image format conversion and the application of many filters, I regularly use IrfanView. It's also a realy great media viewer.
For more advanced manipulations and creation, there is The Gimp, a free open source image creator and manipulator that rivals paintshop pro and photoshop pro on just about every aspects. Very versatile and powerfull. With that power, there is some learning curve that you need to accept.
Electro, June 2012