Well when it comes to editing shots, I too am a big fan of PhotoShop. As I've said before, while there are many other software packages out there, PS is about the best in most peoples opinions.
Personally, I use PhotoShop CS2 which comes with Image Ready CS2, Adobe Bridge and Adobe RAW. In my case I shoot in RAW with a Canon Rebel XT, so once the images are transfered to the PC, I start in Bridge and open the RAW files that I feel are my best shots in Adobe RAW for basic processing and adjustments such as lighting (and shadows), exposure, I look at the histogram, apply basic sharpening and noise reduction, etc., etc.. From there I save the files as PSD's for more processing in PS. I usually start with levels, even if I really don't need to as I find that levels provides a consistency in exposure between my images. From there I usually pump up the saturation a bit and add a little contrast too. I do these adjustments as layers so that I make make some "tweaks" later if need be. After that I will do some additional noise reduction if need be (usually dependent on what ISO I was shooting at) via a separate layer and then I create another layer, add some USM (Unsharp Mask) and then add yet another layer and do a little more selective sharpening with the Highlights filter which I overlay over the other layers (ok...say it with me..."Layers are my friends! Layers are my friends!"). With the USM and the Highlights overlay, I will usually back off the "opacity" and "fill" just a bit as well to give the shots a more natural look. After this I usually decide how I want the shot cropped (4x6, 8x10, etc) and then add my signature and save the file for appropriate printing output. I should probably add that when working with layers, I ALWAYS keep a copy of the original unaltered as my background layer so that way if I make any mistakes (which does happen) I can always go back to 1 and start over again.
Of course this is just a real basic description...very often times I do more extensive manipulations of my images...back ground swaps, selective sharpening, enhance the DOF, adjust shadows/highlights, add color filters, yadda, yadda, blah, blah, blah. I do as much...or as little, as I feel each individual image needs.
As Pat said, the best way to edit any shot is to not have to edit it at all. The first, best way to edit a picture is to get it right at the camera. In my case however because of the way I work both as a photographer and as a graphic artist, this is never the case. Every single shot I've ever printed has been touched in one way or another. Some only very slightly, some very heavily manipulated, but all of my shots do bear the mark of PhotoShop...it's simply the way I work now (and probably somewhat indicative of my being a control freak! LOL).
Also as Pat said, it's clear from your posts that your pretty new at this so I would lastly like to add, read and learn all you can! There is a TON of info on this subject on both the internet and in books. My personal all time favorite book on this specific subject is "Photoshop: Retouching & Restoration" by Katrin Eismann. If I could have no other information on PhotoShop, this book would keep me happy. Additionally, I'm a big fan of the Brian Ratty "On Assignment" series of vid's, which addresses most of the basics in regards to photography in general. I've had this video series for a couple of years now and I still go back from time to time and review the basics. Regardless of which software package you choose, there is no substitute for good camera technique. The first thing I suggest is learning how to take good pictures and once you've learned that, you'll find that programs such as PhotoShop are just icing on the cake (oh, will the tired cliche's never end! LOL!!!).
Alrighty, I hope this is of some help!