If you don’t know or have other graphics software, you can use PowerPoint — and many people do. It’s not high end, but if your needs are simple, the fact that you know and have it is a great plus. PowerPoint 2007 improved the graphics engine and you can add many more effects, such as soft edges, beveled edges, and soft shadows.
You can insert photos (Insert> Picture> From File or Insert tab> Picture), then crop, resize, format, and move them. You can use AutoShapes/shapes as well.
When you have a look that you want, group everything. Go to the Drawing toolbar> Draw> Group. (In PowerPoint 2007, press Ctrl+G.)
Finally, right-click and choose Save as Picture. You can save in a variety of formats.
You can then use that image in another program, to upload to a Web site, or to reinsert into PowerPoint.

Here you see a Twitter background that I created in PowerPoint. Please follow me on Twitter for additional tips that I don’t publish on my site. Go to www.twitter.com/EFinkelstein.
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It’s interesting you suggest PowerPoint for this. I find many people try & do graphics in Word (which is a disaster) but PowerPoint offers better output options.
Robin, I agree that Word would be a disaster. PowerPoint is natively much more graphical.