Yes, sadly Picnik is closing. I've been pre-grieving their closing date of April 19, 2012.
But guess what?! There seems to be a suitable alternative, and it's free with no registration required. Enter, PicMonkey! I've only briefly messed with it, but it seems to offer many of the same features as Picnik. PicMonkey's homepage says "Collage and more coming soon!" So, that's exciting! I am elated that I will still have an online photo editing tool.
Go check it out!
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