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Here's some of the best free software I've come across.

http://www.uraniumbackup.com
Uranium Backup: This is a full-featured backup program, capable of backing up across a network, or to local drives, tape drives. It also can compress data, burn to CD or DVD, and has an elaborate scheduling and file selection system.

http://www.educ.umu.se/~cobian/cobianbackup.htm
Cobain Backup is not as complex as Uranium, but does support backup to FTP.

http://www.gimp.org
Gimp: Freeware photo editing software with hundreds of plugins available.

http://www.openoffice.org
OpenOffice: Freeware alternative to MS Office. Includes spreadsheet, database, document, and presentation editing software, along with and advanced calculator and publishing software.

http://www.realvnc.com
Real VNC: Software for remotely controlling computers across the network. This is a must for any home network.

http://mediacoder.sourceforge.net
Mediacoder: Freeware video transcoding software.

http://www.context.cx
Freeware text editing software with many highlighter templates. Designed with programming in mind.

http://keepass.info
Keepass: portable, yet secure password vault with built in password evaluating and generating.

http://www.deepburner.com
Deepburner: CD/DVD burning software.

http://www.mozilla.com
Firefox: Freeware web browser with built-in popup blocking.
Thunderbird: Freeware Email/Usenet client, simpler and more secure than Outlook.

http://filezilla-project.org
Filezilla: Freeware FTP client and server. Nice drag-n-drop interface.

http://audacity.sourceforge.net
Audacity: Audio editing software, complete with tone generator.

http://www.blender.org
Blender: Freeware 3d modeling, animating, and rendering software.

http://www.vim.org
For text editing, especially programming-related, I like gvim.

http://www.portableapps.com
One of my favorite "applications" is Portable Apps, which lets you run a whole lot of software (much mentioned in the original article) from a Portable USB "thumb drive" without having to install it on the PC. This can also be a great way to try out new software without the worry of it leaving all kinds of crap on your machine.

http://www.pidgin.im
A good multi-protocol instant messaging client

http://www.videolan.org
Excellent video viewing application

http://www.joejoesoft.com/cms/showpage.php?cid=108
Rename Master: Batch filename/extension editing tool. It can add or remove portions of filenames, capitalize by sentence or by word. Tons of features, and is both free and portable.

http://www.fookes.com
Easy Thumbs: An excellent tool for making thumbnails of images in batches.

http://www.cyd.liu.se/~tompe573/hp/project_sfxr.html
SFXR: A lightweight yet effective sound effects generator.

Good list, I use several if those and might look into others.  One freeware program I think everyone should have:

http://www.safer-networking.org/index2.html
Spybot Search & Destroy: probably still the best anti-spyware/anti-malware specific protection for your computer. 

And here's another that may be of use to many people:
http://free.avg.com/
AVG Antivirus - If you can't afford a commercial antivirus product, be sure to get this one.  I use it on my light-duty laptop instead of paying for an extra Norton antivirus subscription.

I got to agree with Rev. Powell about that. I have been using it for years and it's alway the first thing I install on a new computer. Not found anything better for getting rid of adware, spyware, and malware.

My advice to anyone with a digital camera: Do yourself a favor and seek out some free or cheap webspace you can use to back up your digital pictures to, then use something like 'Cobain Backup' and schedule weekly backups. Many people think backing up to a DVD or CD is enough, but, what if your house burns down? Then your computer and the backup (which has a finite lifespan anyways) is gone. If you back them up off-site, you're protected against that. True, you could get a safe deposit box and store your DVDs in it, but those aren't free, and even the most self-disciplined person wouldn't make weekly backups. It's true, recovering your pictures seems trivial when you're talking about losing your entire house, BUT, you can also use those pictures to support your insurance claim in the form of proof of the stuff you're trying to get reimbursed for. Also, pictures are largely irreplaceable.

Just a helpful tip from your Uncle Greg. . .