Mostly, I use PaintShop Pro (see http://www.jasc.com/products/paintshoppro/ ). I originally started using the software that came with my scanner (something called "Image Pals") but that was hopeless (and I now have a new scanner).
With PSP, I started using version 5 (which was the first version to incorporate layers) and now I'm up to version 8. This last version is just as powerful as Photoshop (especially with the new scripting language) but a lot cheaper.
A second graphics package that I use is Fireworks (it's an old version off a magazine disk), which I find is much better at rendering graphic fonts, and image slicing.
You may be right that PSP is slower when it comes to large pictures but as I use it - for smaller graphics intended for the web (rotating, cropping etc.) - it has a faster feel to it.
On one point it definitely has Photoshop beat real good - startup time!
Irfanview http://www.irfanview.com is a very useful freeware program for image manipulation and editing. Particularly useful for batch conversion of files (e.g. rotating lots of files). I use it to rotate my images and to create thumbnail images for MPEG files.
I think it was Irfanview that did a crap job at cropping & resizing pictures when I tried it. The pictures just looked bad, for instance saw edges were visible everywhere, so even though it would be quicker to manipulate some pictures with it, I still use PhotoShop even for this (for instance, if you just want to quickly resize a 4MP picture from the camera to 640 * 480).
Uh, I start to sound like a PS dummy. No, I'm not. PS just seem like the tool if you can justify getting it.
I've toyed with PSP for a number of years with "toy" being the active word (I'm not that great with it). I have Version 7 and am now thinking about 8. My primary usage would be using it with digital photos* and to a lesser degree some web stuff (buttons, navigation bars). Is PSP8 worth the $50 upgarde under these circumstances (or maybe I should just spend more time learning PSP7)?
*I particularly like cutting out people from one photo and placing them in another-is this "improved/simplified" at all?
I've used version 7 of PSP (I bought the anniversary collection) and have tried using version 8.
It add extra filters, but most importantly they re-wrote most of the paint engine. That means you can now save or modify most settings, can run scripts and do a number of things that you just can't do under version 7.
In my opinion, with version 8, PSP has finally hit a really professional level as an editor.