Inkscape is an Open Source vector graphics editor using the W3C standard Scalable Vector Graphics (SVG) file format. Supported SVG features include shapes, paths, text, markers, clones, alpha blending, transforms, gradients, patterns, and grouping. Inkscape also supports Creative Commons meta-data, node editing, layers, complex path operations, bitmap tracing, text-on-path, flowed text, direct XML editing, and more. It imports formats such as JPEG, PNG, TIFF, and others and exports PNG as well as multiple vector-based formats.
Inkscape can be downloaded from www.inkscape.org

Here are some screenshots: