Depends on what your price point is. If you've got the money to burn on the full version of photoshop (what like $500?), then go for it. If not, PSP is a great alternative at the $100-ish range. Photoshop Elements is also a really decent program ($100-ish), last I had used it anyway.
The advantage to using the photoshop programs (full or elements) is that they're industry standard interfaces and so can be useful to learn if you care to really get into digital art for the long haul. Full photoshop also includes the adobe raw plugin (IIRC), which is supposed to be good.
I think PSP ends up being much more full featured than elements, at the same price, but it's a different interface and has different quirks. I have PSP X and like it.
Alternatively, you could try using Gimp for free to see if it fulfills your needs. Or if you're doing really basic editing, I've found Picasa (also free) is super easy and produces quite good results.