Reading through my ImagineFX there is a nice little review of Photoshop Express. This is Adobe's fully online image manipulation tool. To be honest it is nothing like photoshop at all really, but it does deliver some nice image editing features ove the web to people for zip.
I had a play with the test drive and there are a few nice bits, like basic full image colour/saturation/etc effects and a few special effects like colour pop. It is easy to dive onto the site and have a play without signing up which is neat - in fact when you first get there you can play with the great flash interface at the front.
It now talks to flickr and such, but without layers and other creation tools it is really just a nice thing to see out there for people who need something to help with their online library.
[screengrab of the neato flash interface front to Photoshop Express]