Both Photoshop and Illustrator can do logos, but Illustrator is more suited for logo design because logos are usually vector (scaleable to any size) and it was specifically built for this purpose.
But you cannot edit photos with Illustrator, you will need Photoshop for that purpose.
On the Socialite website:
The wooden shelf, the blue/purple/green background, the download button, the facebook/flickr/twitter/rss/digg icons, and the Socialite icon were made in Photoshop.
I can't tell you for sure, but it appears to me that the greater majority of icons/design work was done in Ps.
External tablets:
Most designers probably have a tablet, if they use it a lot I don't know. I once asked a designer of a absolutely stunning credit card swipe if it was done with a tablet, he answered that it was all done with a mouse in Ps. I believe it was this one
Pos Machine Icons by *omercetin on deviantART
For me a tablet would be of use if I did a lot of digital sketching or drawing, but I prefer using the magic trackpad or a trackball when hobby designing website elements.