Snipshot is a cool website that not only let's you crop images online but also enhance, rotate and save them as GIF, JPG, PDF, PNG or TIF. It also offers a free API that lets you use Snipshot for your own website.If you wish to implement the feature all on your own, Mikesdotnetting has a neat ASP.NET solution similar to Snipshot that utilizes a jQuery plugin called JCrop.
Some six summers ago, I wrote an article on CodeProject to dynamically resize uploaded images & save in PNG format using ASP.NET & C#. The necessity for the image resizing script came because a Classic ASP website I was working on moved to the server of a different Hosting company which did not provide the ASPJpeg component that the older one threw in as part of a package deal. The CodeProject article has evoked comments with some interesting possibilities that I did not envision and helpful code suggestions.
Update (9-Apr-10): I missed trying out the Snipshot bookmarklet earlier. It's an awesome feature that lets you import any picture from any web page into Snipshot & edit it.
Related:
Free tools to generate screenshots
Guide to Most Useful Bookmarklets for Chrome, Firefox, Safari, etc.