Paint Shop Pro has never been open-source and it's unfortunate that Corel decided to mess the whole application up. It's why I just continue to use Paint Shop Pro 8, which happens to be the last good version of PSP.
The Gimp, Inkscape and Paint.NET are reasonable alternatives and they seem to be the only bigger open-source applications. You could use Photoshop or Photoshop Elements but these aren't open-source. I like it how Elements can manipulate digital photo's, although it can result in some fun mistakes. Unfortunately, Photoshop itself is way too expensive and Elements just not complex enough.
Still, if you're willing to part from $999, Adobe Photoshop would be the best alternative. Or CorelDraw, although I don't want to spend a penny to Corel, since they broke my favorite graphics editor...
Or you just upgrade to Paint Shop Pro Photo X2, which is inexpensive and still seems to support most of the old functionality. It's just the user interface that I consider useless since I loved the way it used to browse my images.
It's just too bad that there's not enough interest by developers to work on an open-source product that would be as useful as PSP used to be...