For a long time, xFig [1] remained (still is…) my best figure creation utility. There is hardly anything that work as well as this, when it comes to suitability with LaTex. It has its limitations, but it work beautifully (even though slow at times). There is hardly any other software, which take care of the LaTex (Math symbols). Tfig, which is more or less same as xFig (tfig has the back end using xFig, but re-written in Java). In the recent times, I am looking forward to Inkscape [4]. I am yet to explore this good looking software.

Interestingly, I found some softwares, which are very easy and convenient for graphs. They are uDraw [2] (earlier Davinci, developed and maintained by some German University folks) and Graphviz [3] (the grand old AT&T child).

[1] Xfig 3.2.4 user guide
[2] uDraw
[3] GraphViz
[4] Inkscape web page