One of the more popular open source applications out there is GIMP (GNU Image Manipulation Program) which is a powerful photo editing application. While you may here it referred to as a Photoshop replacement, if you actually compare the functionality you will see GIMP doesn’t completely measure up (but you sure can’t beat the price).
However, if you are accustomed to using Photoshop, there are some changes and plugins you can apply to make GIMP look like Photoshop. While the changes here will not completely convert GIMP into a “free version of Photoshop”, it does provide similar aesthetics and functionality.
Again, you can’t beat the price so give it a try.