Picnik
Picknik is another of those online applications, like Google's Docs & Spreadsheets.
Some people are saying that it won't belong, just a few years at most before average computers uses will be doing all their work online using free or almost free web sites for doing things. This site provides a way to edit photos.
Currently it can be used to fix underexposed photos, remove red-eye, or apply effects to photos. It can't come close to competing against Photoshop, but then it is just a 1st generation of the application. It is also in Beta and there may be a charge for some of its features later.
Check it out here
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