I have PS Elements 3 . Its a cut down version of Photoshop. It will use brushes made for the full version , so you can use brushes and filters and stuff. It doesnt have all the tools and all the color correction of the full version but its priced less than $100 .

Paint Shop Pro is a good alternative , so Is Corel Painter Essentials.     PSP has full color tubes available which Photoshop sadly lacks .

There is also free paint programs GIMP and photofiltre are two nice ones . (ok GIMP is not that nice but its free :)   )

Photoshop is actually for Photo editing , hence the name , but it is a paint program too.

If you need video capability there is a bundle , Photoshop elements and  Premier elements . 

Adobe premier is the video application.