I use Macromedia Fireworks 2004 MX (now Adobe Fireworks). You can download older versions of the software for free from
www.oldversion.com. It's only a trial version, but you have thirty days, and you'll get the chance to (1) crank out a label (because honestly, who can't finish the label in thirty days?) and (2) evaluate the software.
I print on a color laser printer, either at work, or at Kinkos. It's important to use laser, because ink will run when the bottle "sweats."
I prefer the feel of laser paper which, which used with a laser printer, makes the label feel glossy. Sometimes, for gifts, I'll use some sort of Avery Labels product, with the glue already stuck to the back. It actually does come off pretty easily of you soak it, but it's EXPENSIVE. For brews I'm keeping around the house, I'll just print on regular laser paper, and then adhere the label with milk that I brush on, or a glue stick. (If you're like me, you'll be skeptical of using milk, but I promise. . .
everyone uses milk, and it's really pretty fool-proof.