My personal favorite application was the PopArt Creator. I don't know how you could use it in the classroom, but it makes my picture look like a poster I could buy in a store!
The Commons on Flickr provide access to pictures of historical events from the Library of Congress. These would be invaluable in giving students a concrete reference point while teaching history.
Montager is another cool thing you could use Flickr for in the classroom. You simply type in a word and it creates a montage of different images with that tag.
