I would recommend TaxAct. Their website addresss is www.taxact.com.
As a new customer, you get everything for just $10. That's the Federal free, and the state at $10. In the following year, you can get the full package (Fed and State) for $19.95, or if you don't mind ordering early in the year, then it's for only $17. That's the route I go because they don't charge my credit card account until the software is available. It's available by January 15th, they bill my credit card then, and I download it then. If something goes wrong with the download, or I accidentally erase it, I just go back to the site and download it again for free.
You can also get it mailed to you on a CD for an extra $5.00. I download it every year because it's cheaper that way.
When I first started to do my taxes with software, I used H&R Block. Did it for two years in a row. It was ok, but I just hated that insane rebate thing they put me through. I had to pay around sixty or seventy bucks, and then after filling out forms and sending them to two different addresses, I'd get my money back. What a hassle--an unnecessary hassle in my mind.
During my second year with H&R Block, they told me I didn't qualify for the rebate. I argued with them via email for months, and they never gave in, but eventually I received my rebate in the mail. Too late then. The damage had been done. I was pissed off to no end. That's when I found out about TaxAct from a friend in the payroll office where I had a part time job. I've never looked back. I use TaxAct every year now, and it costs me only $17.00 each year. It also lets me do what if scenarios. For example, I've already done my 2006 taxes (the one I need to mail or email by April 2007) and my projected taxes for 2007 (the one I need to mail or email by April 2008).
I recommend them very highly. No rebate hassles. No games. And your first year is just ten bucks. Check them out. You won't regret it.
I notice that someone suggested going to the IRS site and getting to do it completely free if your income doesn't exceed $52K. Well, I personally don't think that's a good idea, simply because your income will exceed that amount soon enough (if it doesn't already), so better off, in my opinion, getting used to using software that you'll be able to rely on in future years too.
In the end, the choice is yours, but I doubt you'll ever regret trying out TaxAct. My first year, I accidentally dowloaded the wrong stuff, and went back in to download the right stuff, and then realized I'd gotten my credit card billed twice. This was on a Sunday; so I sent an email to them explaining what had happened. On Monday, the very next day, I got an email back telling me that my accound had been credited to show only one charge. That's how well TaxAct people treat you. No freaking games. If that had happened to me with H&R Block, I would probably have been arguing with them for months.