Pixlr.com (My choice)
This is a free on-line alternative that is all you need for photo editing and works like photoshop. Fantastic piece software, Free and all you need.

Photoshop
Very powerful but expensive and is over kill for most people. I have PS Elements and it is fantastic and a bargin for $US 80.

Alternatives
MS Paint
Clumsy but free and on every PC

Apple Preview
Tools -> annotate -> add text (make sure Pen icon is selected)