To capture a bit about what my young son is like as he turns 2, I used Picasa to add text to this photo.
After uploading the photo, you click on "Text"
Then you can chose your font (whatever fonts you have on your computer), move them around, make them bigger or smaller, and choose what color you want to use. Then just hit "Apply" and save the picture.
Update: I no longer use Picasa to edit photos, but I find PicMonkey (free photo editing website) really easy to use and it gives you lots of creative freedom. I do pay $5 a month so I can use all the premium features. See more here: