Start with Adobe Photoshop Elements 7. About $60 - $90 street. Once you register, you may get regular email offers to upgrade tp the pro version for hundreds less.
Adobe Photoshop CS4 ($699) is not only expensive but it is very complex. All the skills you learn with Elements make it much easier to master CS4.
So for you Elements is the best, I think. I consider myself to be a serious amateur as well, and I use Elements most of the time.Answer 2
Now that we are up to CS4 its getting kind of out of hand. Yes its great to be able to make 3D photos and and that new feature that lets you downsize photos but keep people the same size is pretty cool, but honestly unless you are a pro at photoshop, CS3 or even CS2 is fine. I rarely go into photoshop though, as I try to further my abilities, I also try to rely on post processing less. I use Adobe Lightroom 2 for 95% of my editing and it doubles as an organizer and storing software. It has all the adjustment you will most likely need as well as some cool new features like clone and heal.Answer 3
Save money and buy a good lens instead.
For post-processing use Gimp and UFRaw (if you use RAW files). Shift to Adobe photoshop later on. You can even try out Photoscape if you use jpg files.