I agree having Paint.NET on this list, it is pretty good. I used paint shop pro 6 (yes, the one made in 1999) and switched to Paint.NET last year. It has really expanded my capabilities with regard to art for game development. To get the most out of Paint.NET check out their plugins ( http://forums.getpaint.net/index.php?/forum/7-plugins-publis... ). It seems like there is a plugin for anything you can think of.
It doesn't look horrible like GIMP. Please donate if you can, even $5 helps!