I use AAA Logo + Adobe Photoshop CS for my work.

Depends on the need. Quick banners by Photoshop. Logos always Illustrator.

I usually customize a Paint image because I can easily save it as the same filename as the original theme filename and delter and edit in the theme menu for a fix. Custom tweaks allow for more elaborate solutions, but I have coached a lot of designers at their terminals struggling through Photoshop and other tools to just use Paint and get the job done quickly.

for most of my needs i use photoshop

I think you are using the best

Logos are best done with a vector program such as Illustrator. If you can't afford Illustrator, try Xara Xtreme or, open source Inkscape. Logos done as vector will scale to any size w/o degrading - photoshop logos will not.

Photoshop!!!
Before i learned to use photoshop cs3, i was a huge fan of AAA.

Photoshop cs3 and GIMP

I concur with the post above. Photoshop is a quite good program for this kind of project (CS3, preferably). But might I recommend a much less memory intensive program? Recently I found about Paint.NET, which was originally planned to be the replacement for the default program that came already installed on windows. Only, a WHOLE TON BETTER.

To put it briefly, a watered-down Photoshop. And without all the little gadgets and filters that you almost never use. The program is incredibly memory efficient, and it has a very quick startup time. It has an unlimited history, (unlike Photoshop) simple saturation and color modification, simple effects that are similar to Photoshop's filters, and in all, a quite good toolbar. In my opinion, this FAR outstrips the gimp.

As someone I know would say, just my 237 cents.

- Steve

If you can use Photoshop,then the PEN tool is my favorite choice

I use Photoshop for most of my graphic designing needs. I think its because I know like 99% of the stuff in Photoshop and how to use them.

I just use photoshop (im simple)

Banners by photoshop and logos by coreldraw

Photoshop/Illustrator. You can still create vector-based image in photoshop if done correctly using shape layers, using a layer mask on shape-layers to get gradient/fading/blending styles, although illustrator is more flexible with more option of tools/etc.