Looks cool, and your app might be landing at just the right time, considering Picnik is disappearing in a few weeks. Lots of people are looking for something just like this.

As a user though, you lost me at the first screen. I run my browser at full screen, so dragging a photo over is a bit of a hassle. Plus, I'm not ready to trust your app just yet with one of my photos - is my photo being uploaded to your servers? Is it staying client-side? I could go looking for a photo that I don't mind uploading but... meh, too much hassle. Adding a couple of example images would let me play with the app immediately.

I like your app philosophy, though. I look forward to seeing the app evolve.