There's a really good thread here in Nolani that has a whole bunch of tips for artists starting out, including what are good programs to use. The thread is a little long, but skip over to the last page and read backwards - there's some talk about programs there.
But yeah, the above comments pretty much sum it up. Paint.NET and Gimp are a good alternative to Photoshop, even though they do not have all of the same functions. Also, there might still be a free version of Open Canvas 1.1 floating around the net, which was distributed more widely a few years back.