What would you recommend as the best software for each of the following categories (really must be 3DGS compatible). Please try to give a brief description if possible.

2D art:
3D art:
Animation:
Model Design:
Audio editing/creating:
Video editing/creating:

Thanks a bunch everyone.

2d art: probably photoshop or corel painter
3d art: from personal experience I would say maya and zbrush are my favorites but I havent tried all software.
animation:maya

model design: a paper and pencil

everything is 3dgs compatible (more or less through one pipeline or another) I have found that if you want to make something compatible with 3dgs its more of a "where there is a will there is a way" type of mindset. I have seen content come in from all sorts of software.

You should check this out if you havent seen it already:
starving game developers list from OrangeBrat

I second Painter.

Really a lot depends on what is right for your level and budget, and why you want to use them (to learn to get a job or to instead hustle and get a game done)

Photoshop, Painter (only if u have a tablet!), Deep Paint 3D for paint, 3D: Maya/Max/SoftImage/Blender (free)/Lightwave, Cool Edit is nice and easy for sound, Premiere or Avid for video

I think best for a high end studio operation would be maya, best for an indie low-budget developer would be blender. Definitely Blender is well supported for A6 thanks to ventilator!

Here is a little description of a free/open source dev package:

1: GIMP (http://www.gimp.org) and Inkscape (http://www.inkscape.org). GIMP for general 2D art and Inkscape for vector art/logo design.
2: Blender (www.blender.org) for 3d Art. It takes a bit time to get used to the blender UI, but once you get used to it, you wouldn't want it to be any different .
3: Blender for animation also. Has a comprehensive animation system for a free program. (bones 'n stuff...)
4: Inkscape or pen and paper for model design.
5: Audacity (http://audacity.sourceforge.net) for audio editing. For music creation you probably want to use something commercial like Reason (http://www.propellerheads.se) because there really aint too good free music creation programs.
6: Video editing... Eh, sorry, aint too experienced with free video editing softwares...

2D art: GIMP, Painter X; Both have good capabilities, but Painter has enormous kickstart when you are finishing/polishing 2D art such as decorated concepts
3D art: Blender or MAX
Animation: Blender or Maya; In Maya PLE at least the workflow was pretty smooth
Model Design: Blender; Teh ultimate.
Audio editing/creating: -- You have to be at least level 16 to be able to edit audio streams.
Video editing/creating: -- You have to be at least level 19 to be able to edit videos.

Ambassador made very good suggestions. If you go with 3dgs then you are probably a hobby game-maker with a limited budget.

Max, Photoshop and Maya are really expensive except you only want to learn but not use them.

From my own experience I also can recommend:

1. GIMP / Inkscape
2,3. Blender
5. Audacity

If you ever become a power-user of those tools and you have a few thousand bucks left then you are ready to buy more expensive tools.

Then I would suggest:
1. GIMP / Inkscape / Photoshop
2,3. Lightwave, Bodypaint, Modo, ZBrush, Fragmotion
5. Sound Forge

But you will not become a better artist only through a software license. You still have to learn, practice and work.

oh, damn, forgot about Z-Brush and Modo, my bad =)

open source/free pack:

2D art: GIMP
3D art: Blender, C4D 6 CE
Animation: Blender, C4D 6 CE
Model Design: Wings3d
Audio editing/creating: Audacity
Video editing/creating: avid dv xpress


commercial pack:

2D art: photoshop, paint shop pro
3D art: max, maya, lightwave, c4d
Animation: max, maya, lightwave, c4d, animation:master, messiah:animate
Model Design: silo
Audio editing/creating: steinberg cu.base, nuendo, wavelab; reakktor; sony acid
Video editing/creating: adobe premiere

have a look at my GameDev Linklist youll find a lot of recommendations there. 99% listed there is free and good software.