Since I use Picasa2 for indexing, I tend to use it for simple editing if it's open (love that straightening tool) or FastStone Image Viewer, which is my default viewer.
Beyond that, I've tried the Gimp, PhotoFiltre, Paint.NET and the free version of Serif Photo Plus (v. 5, I think). I'd be inclined to stick with Picasa if it had a cloning tool, except for the very rare occasions when I need layers. However, I find that for "serious" editing PhotoShop Elements suits very well.
People assume that Elements is simply a dumbed-down version of PS, intended to hook users for upgrades. That's not the case at all. PSE is a full-featured program that will do 99% of what amateurs and casual pros need, and the learning curve is nowhere near as steep as PS itself. It even has a few features that haven't made it into PhotoShop yet.
It's not freeware, but given that it's available all over the Web for under fifty bucks and retails for under a hundred, it kicks a lot of butt for the money. I do some fairly serious stuff with RAW, etc. and occasionally layers, and I haven't found anything yet that it won't handle easily. The auto adjustments, BTW, are spot-on with my Epson printer. I rarely do manual tweaks any more.