Adobe products are generally great...
For photo editing you'll probably never find better than Photoshop - CS4 is great, CS3 was pretty close to perfect and CS4 just builds on that.
I've never really used Illustrator, but I'm aware that it's certainly no slouch for (funnily enough) Illustrating work.
I started out using Corel products, using CorelDRAW for vector-graphics and desktop publishing, and Photo-PAINT for bitmap work. They're both great programs, and not far off their Adobe counterparts in terms of power; and to be honest I'd even hazard that their interfaces are a bit more intuative and easier to get to grips with, but the fact remains that Photoshop is industry standard, so if you're going to learn anything from scratch it might as well be that.
You might consider Photoshop Elements - it's got all the features that the majority of people need when editing photos, and is a) considerably cheaper, b) considerably easier to get 'early' results from, and c) a great way to build up your knowledge of the 'Adobe Way' before moving to Photoshop CSx.
Regards,
Rob.