IrfanView is a compact, fast and friendly viewer with support for a large number of media formats. Among its features are support for batch processing, creation of panorama images, editing of multi-page TIFF files, lossless JPEG rotation, obtaining icons from EXE or DLL files, screen captures, format conversion, and a laundry list of other options. What's more, the program's functionality can be further extended via plug-ins that available from the developer itself.
The interface may look a bit uninspiring but few other programs offer the functionality and extendibility that IrfanView provides. Its image editing powers are limited to some basic touchup, though, so don't expect a Photoshop replacement. It contains simple Erase, Draw, Fill, Clone, Rotate, and Color Picker commands which are more than adequate for quick edits or highlighting stuff in screenshots. The tiny 1.3MB installer even includes a separate IrfanView Thumbnails utility that offers an Explorer-like file tree on the left pane that quickly displays all images in a particular folder upon selecting it.
If you've never used it before and are looking for a compact image viewer, be sure to give this one a shot. IrfanView is a free download for Windows -- it comes bundled with Google Toolbar for your browser but you can uncheck that option during the installation process.