Sumo Paint & free web image editors

Sumo Paint is a free image editor that works inside your web browser, without requiring a sign-up. It has many of Photoshop's main features organized in a familiar way and seems to offer somewhat better tools (with a recent upgrade) than most other free Flash-based image editors. (via Ko Maruyama)

Other options do offer a different mix of tools and focus though, so you might try these in a pinch too: Photoshop Express, Picnik (has API for external embedding), Fotoflexer, and Aviary Phoenix.