Uhm, SERIF PAGE PLUS 2.0 Is great! it has alot of qualities PS has its rated the # 2 free or affordable Editing /graphic software in the world!
I use it regularly too! Forgot to mention There is a free version online (though not as amazing) I would sugest googling Free Serif Software and there should be the 3r or second link. Well see!!!
I don't think you can replace photoshop with a free one. Adobe photoshop has more advance features and its the most flexible photo editing tool.
I think GIMP http://www.gimp.org/ is the nearest to photoshop that is free. Paint.NET is also quite good, but not as many features as GIMP.
I promise you Do some research, U can get Some decent quality images and decent editing features with serif and its free however there are upgrades you can buy if u'd like I made this in like... 20 mins on it. comes with foils/3D Image maker, easy transparency guide, over 1000 stock fotos, and its free.