Puppet Warp
Puppet Warp is a very simple, but powerful warping tool that can give a very unique look to your project. (Motion graphics folks will likely remember that Adobe rolled out this concept for After Effects in CS3. Now it comes to Photoshop!) It's so simple to use that the process involves only three steps:
1) make a selection from your image
2) place anchor points
3) warp your image!
Once you put in anchor points you can rotate your image almost virtually any way possible. You can contort limbs behind other limbs, elongate features, or twist things around. This is a great tool that can be used to create unique graphic designs, give a comic effect, or even warp text.
A weakness of puppet warp is not being able to "cut strings" so you can have greater control over how you warp your image. In my example shown I tried to warp the image so that Matt is waving to the camera. Because Matt's arm is too close to his body, his entire body warps if I move the arm. (As creative users from AE's version know, you can get around this by separating limbs into different layers, but this gets back into being more time consuming once more.) Aside from that, this is a very unique and intuitive tool that makes a great addition to Photoshop.