<p>I've recently come across a problem which requires at least a basic degree of image processing, can I do this in Python, and if so, with what?</p>

There is actually a wonderful
Python Imaging Library (PIL)
.  It gives you the ability to alter existing images, including anti-aliasing capabilities, and create new images with text and such.  You can also find a
decent introductory tutorial
in the PIL handbook provided on the aforementioned site.