Paint Shop Pro
Paint Shop Pro is a very simple to use, but feature-rich image editor. I use it for compressing JPEG and GIF files for the Web, but I don't agree with its drawing process, and it's a little difficult to edit certain pixels of an image.
When it comes to editing colours, contrast, and exporting to a number of file formats, this software package is close to perfect.
Jasc has a Flash presentation explaining many of the program's new features: