Mendeley is a free software application that fits under the citation management umbrella. But its biggest strength is its tools for managing all the PDF articles living on your hard drive. Many of us have PDFs with titles like science.pdf or icbt09i11p1173.pdf scattered around our computers and it is hard to know everything we have and what it is. Mendeley automatically finds PDFs, extracts their metadata, renames/moves the files, and syncs them to Mendeley's webspace.
Articles in Mendeley can be tagged, organized into folders, annotated, and shared with others (including annotations/notes). By default, articles are synced to Mendeley's website (500 MB for personal storage, 500 MB for groups, with more space available for purchase) and can be accessed and edited from anywhere, including an iOS app.
When you are ready to cite articles in your manuscript, you can either export to other bibliographic tools (RefWorks, EndNote, Zotero) or use the fully-functional citation management tools in Mendeley. There are plugins available for MS Word, OpenOffice, and NeoOffice. The plugins include hundreds of citation styles, and the ability to create custom styles is coming soon.