There are many useful sites which allow you to upload your images/photographs and to edit them for sharing. Lots of these sites allow you to create things with your images such as albums, books, t-shirts and calendars. These are obviously very useful in the classroom.

Flickr is a photo sharing website where users can upload, share and comment on the photos on the site. You do have the option of making them private as well. You can create artefacts for a small fee.
Picasa is Google's answer to Flickr. It also has the advantage of allowing users to download software to edit your images.

GIMP is a free piece of software that allows you to edit your images before publishing. It is a powerful tool without the cost. If you don't need Photoshop (or the hefty price tag) this will do nicely.

Free Technology for Teachers is an excellent blog with a great feed. This page has 9 great tools that teachers can use with Creative Commons Images. These are free images, which are copyright free.

Once you have your images you may want to crop them, adjust the colour or transparency or add in other features. Picnik is a site which lets you do this for free. It is run by Google, so is good quality.

Zooburst allows you to create interactive pop up books.

While Jing is not purely an image site it does allow you to create screenshots from your computer as well as short videos. It is the best price (free) and very easy to use. Once installed it simply allows you to capture, annotate and share images.