My sister in law to be told me about this free download called Picasa 3. It's from google.
It imports all your pictures and you can create really cool collages with it.....like so:
It's really easy to use - you just click and drag whatever photos you want in the collage, and there's heaps of different options to create different looking collages. You can make your regular photos look like polaroid photos, collages that look like the photos have just been dropped on there, collages with a big main photo and several little photos surrounding it. And you can choose what kind of border you want around the pictures, as well as what colour.
Here's another one I made:
Click here to download it!!