Mike I use photoshop cs3 and sometimes I would use Xara.I also have a wacom intuos 3 tablet.Most of my work is done from the software as I am hopeless at pencils and markers.
It really all depends on what you're comfortable with I tried illustrator and couldnt get the hang of it cus i started out using photoshop and know the program well. So go with what you know.
I would suggest you maybe buy thom taylor's "how to draw cars like a pro" and How to draw cars the hot wheels way(cant think of the name or author right now)
Both have good tutorials on digital rendering also check out these tuts.
http://www.designertechniques.com/na.../tutorials.htm
http://husseindesign.deviantart.com/...III-I-35243447
Zee