For anyone looking for a cheap and effective way to work with Photoshop files without the need to invest in an expensive copy of Adobe's image editing tool need look no further than this Photoshop plugin for Paint.NET.
After downloading plugin, it will need to be extracted and the .dll file it contains will then need to be copied to the FileTypes folder in the Paint.NET installation directory. Once this has been done you will be able to open and save Photoshop files (with the .PSD extension) in Paint.NET.
While the plugin does not offer complete support for all of the features found in the PSD format it does support layers and masks as well as RLE compressed files. Images using 32 Bit-RGBA, gray scale, indexed, CMYK, multichannel CMY, duotone (as gray scale) and Lab colour modes are supported.
The Photoshop file format is incredibly complicated and the PSD Plugin is not currently able to replicate all of its features. However, the plugin is undergoing constant development and a full list of supported modes and features can be found at the plugin web site.