@Illych - I use Live Trace extensively as well to make stencils. You can use it to separate photographs into a selected number of different colors and then separate each color to print and make a stencil out of. I've done four color stencilled works of photographs onto canvas and they make great decorations for the wall of my room.
I was lucky to get a copy of Illustrator cheap with an educational discount, so don't be put off by the seemingly high price of the software if you happen to be a student. It's a powerful tool and just about essential for any serious illustrator nowadays, although that's certainly not a slant on traditional illustrators who work with non-digital media.