We use Graphics Gale for drawing precise pixel art and making animated sprites.
The GNU Image Manipulation Program is a powerful image editor useful for drawing sprites or textures for use on 3D models.
Inkscape is used for creating vector graphics, to design images which look smooth at any size. It's good for desktop publishing too - we use it for our leaflets and posters.
SketchUp is an incredibly easy to use 3D modelling program, good for beginners to have fun with. A cut-down version is free to use. However it is difficult to export the models for use in games.
A powerful, free modelling program. It is fairly difficult to start with but there is a comprehensive tutorial available.
Another powerful modelling program, but this isn't free. It does export to a useful range of file formats for use in games.
Vertex and pixel shaders are small programs which run on a graphics card to produce next-generation graphical effects. FX composer is a powerful shader editor which shows what the effect will look like when applied in a game.
Shader designer is similar to FX Composer, but is designed for the OpenGL Shader Language (GLSL) .