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What's a good and cheaper alternative to Photoshop?

I've got a new digital camera (6 megapixel photos) and I'd like to be able to touch up photos effectively: remove red eye, blemishes, maybe do some cool effects. I'm not a professional but my camera's software doesn't do the job for me, so I need a third-party program like Photoshop, without Photoshop's hefty price tag! What other software programs should I be looking at?

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