IrfanView is an excellent, free image viewing and editing program which is particularly good at removing red eye. It also allows you to add text to images:
http://www.irfanview.com/
The GIMP is also popular. It's offers quite advanced image manipulation facilities but it does take a bit of time to get used to:
http://www.download.com/GIMP/3000-2192_4-10073 935.html
Google's Picasa is also recommended by many people for image manipulation:
http://picasa.google.com/
Lastly, Serif have a great policy of giving away older versions of their full commercial products (without any restrictions on their use), in the hope that you'll buy the latest 'bells & whistles' version. Most people find that the older versions are perfectly good for their needs anyway. You can download Serif PhotoPlus 6 (which is a fully-featured, commercial image manipulation program), totally free, here:
http://www.freeserifsoftware.com/software/Phot oPlus/default.asp
Chris