Okay, I love free. Free is a very good thing.
I found this site, FotoFlexer, one night while looking for a way to add some text to a photo. I didn't play with it much then, but today I decided to make a Christmas photo and just kept on playing. It's really easy to use. You upload a photo (or get one off many sites including Facebook), edit it and then save it back to your computer. Each photo took 5 minutes or less.
Here is a sample of what I did.