So I thought I'd weigh in on this question, because my daughter and I have done digital scrapbooking for about a year. I started out with PSP9 (PaintShop Pro 9) and PE2 (Photoshop Elements 2.0). I found training CD's from Scrapper's Guide, to teach me how to use PE2. the training I found for PSP9 did not suit my learning style, so I went with PE2. I took 5 lessons from the Scrapper's Guide to Adobe Photoshop Elements (Volume 1 Computer Scrapbook Basics)CD in July 2005, and now I feel very competent in digital. I will probably go back and study the other lessons when I feel the need to improve my digiscrapping.
At the same time, my daughter became interested. However, she and I are worlds apart in our computer resources and skills. I use the computer a lot, and am very skilled. When she comes near the computer, I swear if it had legs, it would get up and run away from her! So, to keep her away from my computer, I offered her a copy of SF (Scrapbook Factory) that I had as a free gift. She tried it and loved it. She bought herself an upgrade for Christmas and uses that a lot. My daughter, granddaughter, and even my son-in-law are using SF Deluxe. They have had a lot of fun creating scrapbooks on the computer.
The trouble comes for them when they try to put their layouts on the web or print them out. They can not load their things onto the web because they have dial-up. Maybe it would work better if they had high-speed internet, but we have not tested that. When they try to print, they have to take their layouts to a copy center. Since they can't upload them to the net, they have to put them on a compact disk. There has been some late night hysteria over how that works.
So, these are the good points of SFD from my position: If you have limited computer skills, or limited time, you can produce pretty cool layouts in a jiffy with no training and just a little determination. The bad side of SFD? If you have dial up and a standard printer, you may be the only one who will ever see what you have created. In other words, if your intention in creating digital layouts is to distribute them far and wide over the net, you'll need a fast connection to the net. If you want to print them out, you'll need either a big printer or to take them out for printing. One way around the printing problem is to make your layouts in letter size instead of 12x12.
As for PE or PSP, I think they both have merits, but don't feel like I gave PSP a fair trial because I did not find training that suited me. I liked PSP's photo editing, photo organizing (in Photo Album Deluxe), and the Virtual Painter filters. Photo Album Deluxe and Virtual Painter are separate programs that you can add to PSP and they will work together. I use PSP and its related products to edit the photos and get them in the state that I would want to use them in a layout. I do the photo editing after downloading from the camera and leave the photos in a folder until I'm ready to create a layout.
I have used PE2 for the last year and have created about a hundred digital layouts. I like the control that this gives me over the layers. I especially like the marquee's and layer styles. To see what my digital work looks like, look at the China album in my gallery, and remember, I have created all of that on 5 lessons. There is also digital work in my other albums, but you probably can't tell the difference between my paper and digital.
In PSP and PE you can create backgrounds and mats in any color you like, and even some patterns, but your supply becomes much richer if you buy additional digital elements, which include digital papers, mats, fonts, ribbons, fibers, buttons and embellishments in every shape and color. It takes considerable skill to create these embellishments, so I prefer to just buy them, and keep them well organized.
There are packages, like Adobe Creative Suites, that go way beyond my experience and skill level and I can not comment on them, except that the people who use those probably have college or professional training and do not look to moderate users like me for advice.
So, if you are thinking about taking up digital scrapbooking, and you are not a professional artist or designer, I hope I have helped you choose the best software for your needs.