[dplax]

I've used Photoshop in the past and it does all that you require. If you're looking to own it legally though, the price might be a hitch. Text adding/editing functions are pretty nice and with layers you can add as much text as you want and edit as much as you want.

Photoshop uses a horde of file formats, going from its own PSD to BMP, GIF, JPG, etc, blabla...lots...whatever you need, most likely it has it.

Photoshop also has a lot of functions (manipulating pixels is one of the easiest ones). Very probably much more than you'd ever need. It can definitely do what your dad would need, the difficult question would be whether he'd be able to find what he needed among the horde of available functions or not.

I haven't used much else, but have a few thoughts on:

Paint - very basic, only knows one quality of JPG, has almost no functions, but lets you push pixels around, not very good for text.
Irfanview - good for giving photographs a slap or two before you send them off to relatives, doesn't offer much else in terms of image manipulation, but is a very good converter between file types.