You can use Photoshop with great results, the newer versions (6, 7, CS, CS2) have better tools for drawing shapes and using type. The best combination is to use Photoshop for your photographic (raster) work and lay out the rest of your stuff like type, lines and shapes in a vector program. If you stick with using Photoshop only make sure your artwork is set at a minimum of 300 dpi.
Personally, I'm in a smaller percentage... but I really hate Illustrator. I use Freehand MX as my vector program of choice for numerous reasons. Though if you like how Adobe's pen tools work you will probably feel more comfortable switching between Photoshop and Illustrator as do about 75% of the graphics market...
-baker