Fotoflexer

FotoFlexer is the most powerful online digital photo editor in existence - or thus says the FotoFlexer website at www.fotoflexer.com.

You can use FotoFlexer to perform effects previously available only to professionals using expensive software. You'll be able to remove blemishes, change skin and hair color, morph photos, change backgrounds, and it's free.

There is demo video on the website that you should see.