Well it's gone and I for one am going to miss it. It allowed you to do interesting things really quite easily. Sigh. What do I use to process pictures? Full blown Photoshop with several plug ins and actions. They really do make life easier.
The question you need to ask yourself when thinking about a new photo editing tool, is what do you want to do with your pictures? If the answer is take nice snapshots that will allow you to remember life's better moments, then any free service will do fine. I'm serious. There's no need to spend any money at all. I haven't checked them all out, but Picassa comes to mind as one that would do the job.
However, if you want to do better. If photography is something that you really want to explore and excel at you are going to have to buy a version of Photoshop. There really isn't any other choice right now. Elements is much cheaper and easier to understand than the full blown version, especially if you get Scott Kelby's book, "Photoshop Elements for digital photographers." Just take a look at Karen, over at the Rough String Ranch's work. She has grown so much, she could go pro and sell her work in a gallery.
Here are some of the things that you'll be able to do in PS Elements that you can't do anywhere else.
1. Save your file for the web and other devices. Pictures are optimized for the web in a way which is different from the way you should save them for print jobs.
2. Sharpen you pictures effectively.
3. Work with levels and curves.
4. Work with layers and actions. This is not scary stuff. I'm sure picnik was using both in some of their neater effects, they just didn't call them that.
This is just some food for thought.