I use Photoshop 5.5 with lots of various plugins. Just FINALLY got into that though. Previously, I used MS PhotoDraw 2000, comes with Office Premium. It was OK-ish, when I first started, but I just kinda outgrew it and I'm into Photoshop now.
Take a look at some of the graphics I've made for members of my forums, for examples of my work:
http://liquid.jaminnet.com/graphica.html 
---Skorpion
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<IMG SRC="http://liquid.jaminnet.com/img/skorpion7.jpg" border=0>
<FONT size="4">hi there, little boys and girls!
today we're gonna learn how to poison squirrels!</FONT s>
<FONT size="1">eminem,
the kids</FONT s>
<FONT size="2">
Liquid Nation Gaming Forums Liquified Industries </FONT s>