As with many developers in small or mid sized shops, I have to put on my designer hat from time to time. I can't really justify buying something like CS4 or other designer tools. I do currently have a small tool bag of helpful, free tools like
Are there any other good ones out there that I should check out or should be using?
Edit: forgot to mention that I also have some of the Expression tools thanks to my MSDN
Gimp has a steep learning curve, but will be more flexible than something like Paint.Net (which, by the way I think is excellent).
IrfanView can be useful for batch conversions.
ColorMania is useful as a really simple eye-dropper/magnifier.
Inkscape is a great vector drawing tool.
I find it especially useful for creating simple logos, website backgrounds and other small UI images.
Does take a bit of getting used to though - not because its UI is bad, just because drawing with vectors is very different from freehand and the likes of GIMP and Paint.NET. Well worth the time taken to learn though IMO and there's some great tutorials around.
My favorite tool is Inkscape. It's an SVG drawing program - since all of the drawing is based on vector art (vs. pixels) your drawings can be rescaled perfectly. Also, since your "work" is really a collection of positions, you can tweak the image much more easily than you can with a pixel-based art package.
Still, it may not be appropriate depending on what you're trying to draw.
In addition to using it to generate artwork for my programs, I also use it for mocking up UIs.