This press-release says that PhotoshopExpress will targeted to low-end market to compete with free desktop photo editors. This product has the following functionality:
- red eye removal
- thumbnail generation
- varoius photo effects like sepia
- interactive undo/redo
- color correction
- and so on
This press-release http://www.news.com/Adobe-to-take-Photoshop-online/2100-7345_3-6163015.html says that the product will be free, Adobe is going to monetize it using online advertising.