Here is the criteria for a "perfect" graph editor:
- it should be able to perform an automated, but controllable layout
- one is able to make "manual" enforcements to nodes and edges locations when you need it (or at least such fine automated layout so you don't need "manual" enforcements)
- one could add some math symbols and formulae on a graph
Common vector graphics editors could do the trick, but there is a lot of overhead efforts to draw every node, every edge, every label.
Graphviz is good enough, but sometimes you cannot get needed layout (even if you use several tricks like additional invisible nodes etc) and you should use ladot or dot2tex for math formulae
yEd has nice layouts, but there is a problem with a math text.
This is probably not a math question, but it is common to draw graphs in articles i think.
(Update: 27.12.2010) Here is another candidate for the best editor in TeX - Asymptote (asymptote.sf.net). The very powerful tool at first glance.
(Update: 28.04.2014) The very tasty semiautomated tool to use with PGF/TiKZ is TiKZEdt. You can extend its palette with your own tools and make the process of diagram creation very simple!