This is one of the few questions I get asked I can answer unreservedly. I prefer Movie Magic Screenwriter over Final Draft. I've used both.
This is not to slag Final Draft. But I've found that Movie Magic is more stable, has many more production-friendly elements to it that are easier to find, and its shortcuts just fit my style better. Also, being able to flip scripts between my office PC and my Powerbook versions with no software formatting hinks is beautiful.
One new piece of software that looks interesting is SceneWriter Pro. I've got the free download, will check it out this weekend.
There are, of course, several free/shareware formatting programs. Google will get you there quickly. I was sent Celtx, which isn't bad (although I'm not sure if they're going pro or not, the site seems different). There are a ton of templates for MS Word, like this one. Again, Google is your friend.
For outlining -- white, thin-ruled pad and colored pens. Over the weekend, I'll go more into this (hopefully with a scan), but for me, that's the organic pen-to-paper hindbrain creativity section of the process. There are programs, but I've tried most of them and found them ... excessive. They tend to layer meaning after meaning, text layer upon text layer on every beat -- while for me, the outline is where you see of your story actually works as a script.
Mileage, as always, may vary.