You'd be amazed what software can do for old photos. If you feel like tinkering you can experiment with your choice of the following software. However if you decide to do so always edit a copy of the image and not your original one.

These are free:

PhotoPlus 6.0
http://www.freeserifsoftware.com/Software/PhotoPlus/download1.asp

Paint.Net
http://graphicssoft.about.com/gi/dynamic/offsite.htm?zi=1/XJ&sdn=graphic...

Picasa from Google (quite basic)

Pixia
http://park18.wakwak.com/~pixia/

Ultimate Paint
http://www.ultimatepaint.com/download.php

Have fun!