Photo editor online / free image editing direct in your browser - Pixlr.com:
PhotoShop-like tool completely in web browser
Photo Editing and Effects | Autodesk Pixlr
podcast: Chrome Developer Tools with Shay Friedman @ .NET Rocks!
Carl said: "best web tool ever"
But in fact this is a Flash tool... not "real" web, but useful tool...
Review: Pixlr Editor, the free online photo editor | andreasviklund.com