If you are more technically skilled, you can achieve the same effects (with somewhat more variety) with GIMP, a free desktop image editing application that can run on Windows, OS X, and Linux. GIMP is very robust, but let's not kid around here -- this Photoshop-like application has a steep learning curve. If you can master it, though, you will have much more creativity than Picnik offers, at a better price.
Creating Web sites
In the good old days, it was all about HTML. Now it's all Web 2.0, and you had better go big or go home if you have a Web site to create.
Desktop applications like Dreamweaver offer magnificent creative tools, but require a big investment in terms of both cash to buy them and time to learn how to use them. Dreamweaver is not a cheap way to go, and it doesn't solve the problem of finding a place to host your Web site once you've built it.
Robust content management systems like Drupal, Joomla, or WordPress use a modular approach to Web site creation, enabling users to put together the parts they need in smooth fashion. Additionally, many Web site hosting companies provide ready-made sites with these CMSes already installed: all you have to do is go in and customize the site with your content, images, and modules.
Google Sites is a free real-time site editor that lets you host sites on Google free of charge. It's a what-you-see-is-what-you-get tool, but it's very simplistic and a bit cumbersome to manage.
For ease of use and flexibility, WordPress is probably the best way to go for all but the most complicated web sites.