Looks like the previously mentioned Photoshop Online isn't going to be Photoshop Online after all. Adobe senior product manager John Nack says instead that by "Photoshop-branded" we don't mean the professional version of Photoshop. The tools being discussed here are targeted at the consumer market-- especially all the people using social networking and media sharing sites."

So instead of a tool for serious amateur photographers or pros it's aimed squarely at a lower end consumer market. That answers a few of the questions I'd had earlier and really sets the stage for an interesting play for dominance in this market between Google's Picassa and the "Photoshop-branded" product Adobe is going to put out. Since both products are going to be free it seems like the definitions of success and the path to revenue will be very different for both. Will Google try a better/bigger system of getting people to order prints (a la Flickr's which allows you to choose having prints mailed to you or picked up by you at your local target), will Google try to grow Picassa's web album feature? Will success for the "Photoshop-branded" product be measured by how many users of the free online product go on to buy Photoshop Elements?