Personally I would plumb for Photoshop Elements 5, it has many of the features which are available in it's big brother Photoshop CS2 or CS3. It has the latest RAW file software built in, takes the majority of the thousands of photoshop plugins that are available and can be had for approx £45.
Here's a web link to a 30 day trial period of Photoshop Elements 5, you can purchase it online if you want to keep it after 30 days.
http://www.adobe.com/products/photos...in/tryout.html
nirofo.