So far, the general consensus is that The GIMP (GNU Image Manipulation Program, for those who might not know yet) is not quite a competitor for Photoshop or Paint Shop Pro. Still, it's quite close. Close enough that I certainly am not qualified to judge. I simply don't work at that level in graphics.
In my opinion, and apparently the opinion of others, too, The GIMP's interface is even more confusing than that of it's competitors. As a result, the GIMP team has made a lot of changes. I think they are worth checking out. I'm a GIMP user on Windows or Linux and looking forward to them making more changes to make it easier for folks like me to use it profitably. I think this new release will be well worth your time to check out.
UPDATE: Here is Scott Gilbertson's Wired blog post on the subject, which seems an even better overview of things.