I use Illustrator everyday, because I'm an... um... illustrator. I believe it's the best program out there for vector graphics. The other format you mentioned at the top is CorelDraw, which is similar in nature, but not quite as capable.
Neither of those will be cheap or free, and BTW, there have been 5 new versions since Illustrator 7.

If you can find any early versions of Illustrator, those will do what you want as well, although font-outlining may be a key feature that they're looking for.
Adobe Photoshop is not going to cut it for what you are looking for. However, it may be acceptable for you to supply very-high-resolution pixel-based images for what you need.
There are ways to convert one to the other, Fuze. PM me if you'd like further advice, I do this stuff all the time.
[btw, JB88... you can Export from Illustrator into Flash very nicely, had to do that today, actually.

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