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My favourite has to be Paint.NET. I've tried both Photoshop and GIMP and although they could both do more, the interfaces were harder to use. Paint.NET can do all the things you really need to do for scanlation. I use it for typesetting in the group I work for I and I get by just fine.
I have a question.
For lineart and colouring, is it okay to use CorelDraw x4 instead of Photoshop?
As in - will I get the same quality on my results and is it easier or more difficult to handle?
I was actually dicking around with something I got linked to from another forum. It's part of the Aviary suite (www.aviary.com), called Phoenix. It's quite like Photoshop, but doesn't quite have all the same functions. At the time I used it, it was limited to 800% zoom and some other almost trivial things like that. But it seems to have everything that the basic scanslator needs. It can do what you need and it's all web-based. You can save your work to your computer when you're done, too.