Pixia is a Japanese graphic software. This software reminds one of Corel Painter or even artrage. The major difference from Corel Painter is that Pixia is completely FREE. There are several version that can be found via search on the internet.
With Pixia, you can give your photo images a creative and illustration-like feel. In my opinion, this is one of the best freeware for creating images that look like they were created using traditional medium such as water-color.
Another beautiful feature of this software is that it can accept photoshop plugin. This greatly expands its compability. Furthermore, many photoshop plugins are freely available on the internet.
Pixia comes in an English version.