Picnik is one of the best online photo editors – it is now a part of Google’s Picasa line of free online photo albums. The good news is that Picnik is fast and has some of the best online photo edit features plus context-sensitive help & hints.
The system seems to be a bit slower on startup than benchmarks on the same machine two years ago [20 seconds then 32 seconds now, but that may be online service variations]. But the operations are still fast and responsive. More interesting are three things Google has done with Picnik.
First, Google has barely changed Picnik at all from a functional and feature viewpoint. What you saw before is what you now get. Second, they have retained the $25/year Picnik Premium edition which adds a number of creative effects and special features to Picnik’s photo editing capabilities. This is an important decision because traditionally Google has not charged for its consumer web services – letting advertisements pay the freight. For example Maps and Gmail on the consumer side have added features that could be thought of as premium but they have not charged for them. Picnik appears to be a testing of the waters for charging for premium Google Online services.
The most important aspect is that Google continues to invest in Picasa and “social” image processing. 
Google now has in Picasa roughly equal online web album features as Flickr or Facebook but now with a)unlimited free web storage of images; b)more useful image editing than Facebook [but not Flickr which uses Picnik too]; and c)recently improved discussion capabilities to match Flickr, Facebook and other online photo services. See here for Picasa’s nifty Explore page, which like Fotki and Flickr, watch the Photo Pulse of the World day in and day out. Clearly along with Buzz, Calendar, Reader, and the upcoming Google Wave, Google is lining up to face the growing Facebook challenge for eyeballs and online advertising space.