Picnik Image Editor
I was looking for some online apps that allow my students to edit images. Not everyone has software available and I wouldn't recommend the Photoshop route for beginners (cost + complexity).
Earlier I had recommended PXN8.com which allows basic image editing online (no download required) and then you can save your changes or directly upload them to Flickr.
Recently I discovered Picnik which also allows you to fix underexposed photos, remove red-eye, apply lots of effects,crop, rotate, and resize in real-time. It works directly with many photo sharing sites on Mac, Windows, and Linux. There are free and premium versions.
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