Zotero (pronounced "zoh-TAIR-oh") is a Firefox addon that collects, manages, and cites research sources. It's easy to use, lives in your web browser where you do your work, and best of all it's free.
Zotero allows you to attach PDFs, notes and images to your citations, organize them into collections for different projects, and create bibliographies.
It automatically updates itself periodically to work with new online sources and new bibliographic styles.
The screencast below gives you a quick walk-through downloading it and what it can do.