Yeah, I am also for Adobe Photoshop (haven't taken a look at the newer CS3 yet, I heard rumor they messed around a little too much with the GUI).
I do like Adobe Photoshop CS2 though (the first of the series I have ever used) and I would put it above everything else (unless the price is a problem, and damn it is not cheap lol).
In the past I mostly used Microsoft Paint (it's still the best for anything basic and even sometimes more advanced things, mostly for ease of use and how simplistic the interface is), but I did try things like Jasc's (I believe?) Paint Shop Pro, but I never ever got along with that program.
I would also recommend Ultimate Paint, I would not go as far as to say it is anywhere near as feature filled as Photoshop from the get go, but it is fairly easy to use, not expensive (the light/trial version is just fine aside from some blocked filters and such), and works well especially for things like graphics file format conversion, good resizing, very high level of zoom in and out, transparency, very useful for pixel level editing (like if you were sprite editing for example) etc.
I also like GIF Movie Gear, mostly for optimizing GIF's, but it is very useful if you have the urge to mess around with, or create animated GIF files, and setting up transparency (even for multiple colours) just could not be much simpler.
Well that's all that I can think of at the moment, I haven't really got on to things like GIMP or the like just yet, but I suppose I should check those out at some point (I have seen it being recommended quite a lot).
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