Toribash
The best program to use is probably Photoshop, but GIMP is easier.
aaaaAAaaAasaaadABabababalnandàas2
Personally I think it's nice to start of with GIMP it's free and quite easy, after that you could start using Photoshop, it'll be easier to understand once you have had a bit of experience.

http://forum.toribash.com/showthread.php?t=500275

That link might also be interesting if you want some advice on how to best make a head etc.