Very few images are ready to use right out of the camera, and will require editing (also called post-production). There is a wide range of programs out there for even the most beginner
$699 from Adobe.com, $19.99 to $29.99 monthly cloud subscription
The big daddy of all photo editing programs. You can do EVERYTHING in Photoshop — provided you have the hours to learn it all. I have been using Photoshop professionally for more than 10 years, and I still haven't needed 1/10th of its power!
If you have Photoshop available to you already in some manner, great! Otherwise, I would not buy it only for Etsy. Adobe recently introduced a cloud-based subscription service for its programs. It sounds great, but designers are wary and it may actually cost you more over the life of the program. I am a bit iffy regarding cloud technology, but that's another topic for another blog!
$69.99 from Adobe.com, $19.99 to $29.99 monthly cloud subscription
A more affordable, less powerful version of Photoshop. I have an older version of this that came with my DSLR camera, and it's a great program for editing. It has pretty much every tool you would need for Etsy purposes of basic photo editing. Two big things it does not support is CMYK functionality (important if you're producing images for print) and layered images (for more advanced image work).
Paint Shop Pro
Difficulty: Advanced Beginner
$49 from Corel.com
A strong competitor to Photoshop Elements. PSP supports layers, but its color adjustment tools aren't as versatile as Photoshop. It is less of a memory hog, so it works better on older computers. I also find the tools much more user-friendly. Photoshop Elements still retains the language of Photoshop, which can be confusing to people who don't know printing or editing terminology.
I'm going to have to bow out here — I have never used free editing programs because, as a graphic designer, I have Photoshop available to me both at home and at work.
Here's a great article from TechCrunch about free editing programs.
Two programs that I've heard a lot about are Picasa and GIMP.
Picasa: download from Google.com
GIMP: download from gimp.org
If any readers have tried either of these programs (or any free editing programs), please weigh in!