Oh definitely, it could easily give Photoshop a run for it's money, when you don't need the professional (and rarely used in most graphic design fields) features of Photoshop, such as color seperations, CMYK color mode, bitmap color mode (black & white halftones, also known as 2bit color), duotone, lab color, color matching, all the pre-print/pre-press options that photoshop has, etc.
For web design, and even 3d modeling/animation (God bless Make Seamless!), GIMP is more than adequate from what I'm seeing. I'd even go so far as to say it's comparable to Photoshop 5.5, possibly 6 (definitely 6 with some more intuitive alignment options, keep text vectored, and add layer effects (like drop shadows/glows)). After being so used to Photoshop 6 and 7, it's weird having to go back to add a drop shadow, or glow to text, and having to manually do it again. But It's easy enough.
Merging layers is a bit awkward too. There's only Merge Visible and Merge Down. No Merge Linked. So you gotta hide all layers you don't want merged together. And linked layers aren't independantly linked... kind of hard to explain, but when you link layers in Photoshop, you can have multiple link "groups" of layers, but in GIMP it's all a global link. So if you want to link the first two layers and move them, you need to unlink the middle layers, or you'll be moving them as well... if that makes any sense
I just found that out the hard way, went to scale some link buttons down, and all the sudden the header title for the mockup shrunk down too
.xcf format seems to be about half the size of .psd format as well. But that's only dealing with images under 500k so far... curious how that ratio is affected with some of my 30+ meg images. Might see if GIMP will import 'em later and check it out. I did however notice that importing a .psd doesn't bring along any layer mask's linked to layers, which is odd since GIMP does have layer masks.
Also, being that it's all seperated into individual windows, rather than having everything in a unified workspace ... minor annoyance. It's also one of the reasons I can't stand Mac's
Fullscreen mode would work if you could have all the dialogs/palettes on the screen too, without having to go through a menu ... there's just some things you can't use a keyboard shortcut for
Are there any themes that can be installed that will allow it all to exist in a unified workspace?