Illustrator is great (big learning curve)
Ideal for postcards flyers brochures and posters although only a page at a time.
and it is absolutely necessary for logo design speaking as someone WHO work in the printing industry I absolutely hate it when someone sends in a bitmap logo they made in photoshop ugh!!!!
it is also an essential tool for editing and repairing problem PDF files
I consider it the Swiss army knife of graphics program and a necessity for serious graphics professionals.

in regards to photoshop cs cs2 cs3 I think the upgrades are little more than an attempt to squeeze more money out of us(OK there are some cool new features but still what ever happened to cs1.2.31)
of course Photoshops value is obvious so i will leave it at that.

the free tools will most often get the job done but if you need to send files to a printer you may just frustrate them


for booklets, manuals, and modules In-design or quark is the way to go