Here are some interesting and fun ways to edit and enhance your photos using some of the free Web 2.0 apps available online:

Picnik
Picnik makes your photos fabulous with easy to use yet powerful editing tools. Tweak to your heart’s content, then get creative with oodles of effects

SmileBox
Create amazing greeting cards, scrapbooks, slideshows, birthday cards, and more using your photos, videos, and music with Smilebox. Email, blog or print.