There are plenty.
These first two are "painterly" programs, geared toward creating paint-on-canvas, pencil-on-paper images. All of them share similar capabilities and can be substituted for one another, but it's easier to use one tooled for the style you're going for -- like a steak knife can spread jam and a butter knife can cut, it's better to use the other for the job.
Project Dogwaffle, free version:
http://www.thebest3d.com/dogwaffle/freeIt's a feature-limited edition of Dogwaffle Pro. Biggest drawback -- can only save in BMP and TARGA formats. You'll need to import the final image into something like
IrfanView (or a recent edition of MSPaint) to convert to GIF, PNG, or JPG.
ArtRage:
http://www.ambientdesign.com/artrage.htmlWorks best with a graphics tablet. Biggest drawback -- weird interface.
The other, more Photoshop-styled programs --
Pixia:
http://park18.wakwak.com/~pixiaJapanese program, English edition. This one had quite a following for a while, since dwindled while the author has been AWOL for the past year or so. Works well with a graphics tablet. Biggest drawback -- ugly, somewhat confusing interface.
PictbearSE:
http://sleipnir.pos.to/software/pbseAnother Japanese program, simple and quite nice. Made by the author of the popular Sleipnir browser shell (similar to Avant and Maxthon). Biggest drawback -- no help, no instructions.
Don't worry about the all-Japanese page, the installer will switch to English if you choose and it'll allow you to install an English version of the software. Here's the download link, in case you miss it:
http://sleipnir.pos.to/cgi-bin/d/download.cgi?dl=epbse_rc5Photofiltre:
http://www.photofiltre.comEnglish version of a French program. Compact, precise, simple to use, with a good selection of tools and filters, very nice. Good tutorials on-site. Biggest drawback -- no layers
Photoplus 6:
http://www.freeserifsoftware.com/software/PhotoPlus/key_features.aspPhotoshop-style interface, simple to figure out. Has a small, but useful feature set. Biggest drawback -- requires online registration to use. Give them a throwaway email to spam.
The GIMP:
http://gimp-win.sourceforge.netThe venerable GIMP, for those who can't afford or don't want Photoshop. Powerful program, with a depth of features that can take months to get acquainted with. Biggest drawback -- strange interface. Few like it, some find it enough of an obstacle to give up.
Grokking the GIMP is a dated, but comprehensive guide to using the GIMP:
http://gimp-savvy.com/BOOK