I designed my logo in Corel Draw (I also have Photoshop and could have used it, but I am more familiar with the drawing tools of Draw). I created the text layouts in Word. All work was done 2x per the decal printer.
If you don't have Corel Draw or Photoshop there is free open source software on the internet called GIMP that is very similar to Photoshop. It has a bit of a learning curve but once you get the hang of it you will find it quite useful.
Inkscape is a great choice for decals. As a vector-based program, it's better suited than GIMP which is raster-based. Vector images are independent of resolution and can be scaled up without any loss of detail. Vector images are also easier to edit and manipulate. You can do things with them that you can't do with raster images. See the two pics below.
Showing the difference between raster and vector images.
Showing how vector-based letters can be manipulated after being typed. All the letters started out like the 'M'. You can alter text by selecting nodes (those little gray squares) and move them around.
Hey Steve - thanks for the info. I had heard of the terms raster and vector before, but didn't know what the difference was. I am going to have to give Inkscape a try for sure!