With my students we worked on images/photographs and manipulation of pictures. They introduced me to picnik, a simple and funny site, useful also with very young pupils.
All I can say is they definitely had fun with their drawings and pictures!
We also tried some of the image editing tools suggested by Daniela in the "useful web tools" folder. If you know others, please let me know as we're working with my Art colleague on this kind of activities with very good results. So you'll help me a lot!