I personally prefer fireworks cs4. whatever you can do on photoshop you can do in fireworks but not the other way around. also you can do alot more with image quality....thats just my opinion
Illustrator or Freehand are the industry standard for logo design in the U.S., primarily because they allow you to save as scalable files that can be enlarged or reduced without loss of quality.
A lot of thread asking about this. I prefer Illustrator, photoshop and Corel Draw in the order for my work. For free tool, try inkscape. It's awesome...