Actually Adobe are up to CS6. Many people seem to find Lightroom 4 with some plugins good especially if you need to manage a decent sized photo database.
It really depends on your needs. I've always used Photoshop elements (currently using PSE 9 although 11 is the latest) because it is good value for money and uses the same CS engine with some facilities inaccessible.
I also use Faststone Image Viewer (4.8 - free) as a viewer because I don't like PSE Organizer. Although I don't use Faststone for editing it's quite good for basic stuff - level adjustments, colour saturation etc.
Gimp is the defacto free CSx but it has a bit of a learning curve.
I think you can pick PSE 11 up for ~$100 or less. What is important is there are many books on how to use it and it has a pretty good RAW plugin. Pick up the book by Scott Kelby and Matt Kloskowski along with the PSE manual (free PDF) and you are flying.