Why I like it: Two battery packs, flashlight is really handy, everyone needs a cordless drill
What I use it for: Everything really
Why I like them: Lots of sizes, perfect for cordless drill
What I use them for: drilling into wood including my paneled walls (when I hang pictures), used these bits to construct workroom tables
FYI: these are for wood and not drywall. If you need to hang things on your walls get a bit made for drywall so you don't ruin these.

Vaughan Superbar, Amazon $9.99 Why I like it: it works What I use it for: removing moulding, baseboards, anything that requires "prying"

Why I like it: Big, long, heavy duty
What I use it for: Measuring things of course!
Why I like it: Eyeballing it just doesn't work
What I use it for: Hanging pictures, making sure furniture is level, etc.

Stanley Hammer, Amazon - $13.43
Why I like it: Heavy duty
What I use it for: Nailing and nail removal
Why I like it: Easy to use and transport
What I use it for: Cutting moulding, baseboards, any type of lumber. I use this saw WAY more than I ever thought I would. If you are a DIY-er you will definitely get your money's worth. I also have one of these in my workroom.

Why I like it: Nothing fancy, easy to hold, easy to use
What I use it for: Recovering chairs, any light duty fastening

Why I like it: Easy to use
What I use it for: Cutting larger pieces of lumber (clamp on a "guide" and it functions as a table saw), I recently sawed off the bottoms of several doors so they would open/close properly.

Why I like them: Several sizes, you need smaller screw drivers, comes with an Allen wrench.
What I use them for: Furniture assembly, childrens toys, misc adjustments
When you're ready to get a little more serious...
If you're going to tacking more advanced projects or if you're going to do any moulding or millwork you should consider a compressor. Do not be scared because it's loud. And no, it will not explode. There is no comparison for a pneumatic nailer or stapler.
I love my Porter Cable because it is oil-free (very important for a workroom), it holds 6 gallons of air, it is powerful enough for moderate jobs, and it's portable. It would be a perfect machine to have at home. It even comes with a brad nailer. Purchase a stapler and you will have a nice set. Other attachments can also be purchase for the compressor such as a nozzle that will allow you to fill bike tires, inflatable water toys, etc.

What is your favorite tool?