Do try a search. There's quite a few discussions already about software that is frequently used. This is very easy to find in the "digital darkroom" section.
yes i am using Photoshop CS3
but the latest one is CS4
the thing is Photoshop may be today's state of the art enhancing software, but it is bloody expensive as well. If you buy it off the shelf it can cost you $1000+/-
go for the academic version which is much cheaper.