If you do some searching around the internet you can find both Photoshop and Illustrator for very cheap. I downloaded Photoshop CS4 for just $99 and just found Illustrator CS4 for only $89. I'd post a link, but don't know if that's allowed or not.

Serif software is also good for converting flat images into 3-D objects, which is great for logo creation. I've got their desktop plus software and this is definitely it's best feature.