An update to the free, popular utlity has been released. See Paint.NET - Download#download for download link.

From Paint.NET Blog:

"Here’s what’s new since v3.5.4:
  • Fixed the bug where saving as 8-bit PNG/GIF/BMP wasn’t always working, usually with larger images.
  • Improved the performance of the Gaussian Blur effect by 30-40%.
  • Improved the performance of all the layer blending modes by 15-30%.
  • Improved the performance of zooming with the mouse wheel on dual-core Intel Atom systems.
  • Updated to support .NET 4.0 if no other version of .NET is installed.
  • Reduced download size from 4.8MB down to 3.5MB.
  • Fixed a small error in the Chinese translation.
Please note that Service Pack 3 (SP3) is now required for Windows XP users. For those using Windows Vista, you must now have Service Pack 1 (SP1) installed. If you do not have these installed, then the Paint.NET installer will open the appropriate download page on Microsoft’s site."

Joe