Well, I can honestly say that I never expected my post to generate this number of replies.
Let's nail this price thing once and for all. Illustrator CS5 on the Adobe site costs $599, which converts to €455 and not $860 as quoted above. Your markup seems a bit excessive, Frank. It doesn't make Illustrator a bargain at €455, but it's not the rip off it has been made out to be either.
So for €455 it is good for the price.

Frank, I appreciate that you get along without Illustrator very well, your work shows that you are at the top of your game using Xara.

I wasn't trying to make any comparisons with other design software, but for €85 I think Xara Photo & Graphic Designer is an absolute bargain, but perhaps Inkscape is the best value of all. Value for money is however dependent on a lot of variables, not least being what the intended use of the product is. You could spend your hard-earned on Serif DrawPlus X5 which at €100 looks pretty good, slotting into the same bracket as the Xara product. But in fact Drawplus X5 is extremely buggy. It does have an eraser tool and an CMYK environment and publishes to .pdf and lots more quick shapes, but its brushes are raster and overall the program is a bit of a lame duck in my opinion.

Illustrator is, as has been pointed out here, the preferred software as pauland said; "Adobe software has become the common language of interchange between companies involved in Media. Besides being the common language of asset interchange, it is also the common language of skillsets amongst people - there's an expectation that you know how to use Adobe software."
If you are just a hobbyist then you probably don't need to own Illustrator, but it is still a nice thing to have, you do get a lot of bang for your buck. Luckily for me I was given it as a present, so price isn't a concern for me. it just took me a long time to dip my toe into the water, and having immersed myself, I'm pleased that I did.

Thanks Mike (mwenz) and Steve J for your comments - much appreciated.
Bob.