Well I use Photoshop Elements 2 because it came on this laptop and generally I found it more complicated to use (using layers and so on) than what I was using previously, Microsoft Photodraw - also Irfanview and Photo Editor for simple non-drawing stuff.
But Photoshop is more versatile, and works better, than Photodraw but I don't use PSP so I'm not that much help here really.
PSP is much cheaper though that full-Photoshop and I have read reviews which says they are both equally good for web-based graphics but Photoshop is better for print graphics. Macromedia Fireworks is another option.