ADW Launcher is a free home-screen-replacement app that provides more flexibility and customisation options than the default home screen does.
When you install the app, it adds an 'ADWLauncher' entry to your home-screen menu. Clicking on that will configure ADW's behaviour. Options are divided into seven categories: Screen Preferences, Drawer Settings, General Behaviour, System Preferences, UI Settings, Themes Preferences, and 'Backup and Restore'. At the bottom of the screen are 'Restart ADW' and 'Reset ADW to default settings' buttons. The app offers so many possible settings that I suggest you just go through them all and try them to see what works best for you. If you don't like the result, you can always press the reset button.
At first, ADW will seem to make few changes aside from replacing the app-drawer icon on your home screen. Be aware, however, that ADW also moves the Trash icon from the bottom of the screen to the top; that's important to remember in case you want to customise the phone later and you can't figure out how to remove widgets and apps from the home screen.
ADW allows you to customise the home-screen dock however you prefer. By default the dock has three shortcuts: the phone icon, the ADW icon (which opens and closes the app drawer), and the web browser icon. You can expand the dock to hold five shortcuts of your choice, and you can even add a second dock to hold as many shortcut icons as you wish.
In Themes Preferences you can select different icon and home-screen themes. You can download additional ADW themes by searching the Android Market.
'Backup and Restore' is a feature you should use frequently. Once you have set up the home screen to your liking, save the configuration on your SD Card so that you can restore it later when you get a new device. You could also arrange several different home-screen layouts for different tasks; for instance, you could create a layout dedicated to work and another devoted to games.
If you like ADW, consider purchasing ADWLauncher EX (approximately $3.20 (£1.95) at this writing), which adds even more options and visual effects. You might also want to check out LauncherPro, another app that deserves high ratings.