Adobe PS is probably the standard that most people use. Version doesn't really matter much except in new features. The newest version is CS, but 7.0 is still great and if you can get a good deal on it I would get it. There is also Paintshop Pro by Jasc and Corel Photo-Paint.
I used Adobe ImageReady CS to animate my sig (comes with Photoshop).
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'13 Mustang 3.7V6 - MT82
'00 GP SE (L67 Swap, XP, Headers, 3.25")
'98 GTP, '01 Bonne