Paint.net is one of them.
As I was loading a free copy of Windows 7 today, I downloaded a variety of programs and noticed that Paint.net had upgraded once again, adding features and solving a few problems.
It's notable that they are also following Microsoft in the way of support. Windows XP SP2 is out with this version but XP SP3 as well as Windows 7 are supported.
Microsoft originally funded the program and it continues to be maintained by a group of the alumni that started it (although it is noteworthy that they have monetized the website with ads .... guess donations were down ?!).
Regardless, this absolute free, and at least for now, spyware and adware-free gem is a lot closer to Photoshop that it is to Microsoft Paint, even the new version of Paint built in to Windows 7 (which isn't shabby :).
I test drove it earlier in the week and found the latest version (3.5.5) 'nice' as expected in both XP3 and Windows 7.
You can grab a copy here.