I have several favorites:
Templates and full page graphics: Photoshop CS2.
Small images or just adding text quickly to a bulk of images: Fireworks.
leisure signatures and avatars: The Gimp.
Photoshop is the number 1 solution for anyone ranging from beginners to professionals. It is the industry standard when it comes to imaging as a whole. If you understand Photoshop 7, there is no reason for you to not understand CS, CS2, and CS3. They're the same programs, with simply additional features.
photoshop, but up to CS2, cs3 is far to lag for me. I've 1.8Ghz Core duo + 2gb RAM i think it's still not enough. Other that photoshop, a free Gimp software is good.
Right now i'm using Photoshop CS3. I like some of the newer features and the new sleek look of it. I used to use JASC Paint Shop Pro quite a few years ago, I thought switching over to Photoshop was going to be a hard transition. Now that I use Photoshop, everything else seems to be useless.