PhoXo is a free and powerful image editing software. It's tiny, fast, easy to use, can be treated as a mini PhotoShop.
PhoXo features include layers, over 50 special effects, batch processing, and a wide variety of other useful and powerful tools for selecting, crop, painting, retouching, measuring and navigation. Especially, you can easily add text effects to images, such as shadow text, ripple text, gradient color text, etc. PhoXo web site provides a large number of resources, including step by step tutorials, thousands of free clip-art, frames, patterns, textures, and shapes.