I'm surprised I haven't heard about something like Paint.NET before today. The GDI+ tools in the framework have received plenty of coverage during the last couple of years. Seems likely that someone, somewhere would create a replacement for the aging paint program. I've know other developers that have been snooping around the GDI+ namespace, In fact last summer I was teaching a VB.NET class (for a bunch of Microsoft employees) and one student, who had a graduate degree in imaging technology, wrote some great photo filters using VB.NET and the System.Drawing namespaces. I'd give him credit here but I can't find his website
Paint.NET was written in C# and shows off what you can do with a GDI+ application. It is a nice photo editing tool and has many interesting features including support for plug-ins. Best of all you can download the source code and see how it was put together.
I've seen most of the tools used in this program demonstrated elsewhere. For example the color picker control in Paint.NET looks remarkably similar to the one written by Ken Getz for this MSDN article. But Paint.NET has them all wrapped up in a single package.