The wysiwyg (what you see is what you get) module allows you to plug feature rich editors into drupal's content editing process. This makes editing content similar to using a program like Word or OpenOffice. Read the docs to confirm, but installation should be as easy as extracting the archive into sites/all/modules, then enabling the module. You will need to download an editor and place it in sites/all/libraries/<editor name>.
Many editors are available to use. The TinyMCE editor works well.
An alternative to wysiwyg + an editor is to use the YUI Rich Text Editor (wysiwyg module is NOT required, but the Yahoo YUI module is). This is not the same as adding the YUI editor to wysiwyg. One of the benefits of this is built in capability for image uploads. However, the image upload seemed to only work on the body field. I had a custom page with two custom fields from cck, but I had to enable the Body field, then use it to allow the image to upload, then copy and paste the image into one of the new fields.
Another thing to remember is that you need to explicitly configure the exact html id for each field that should use this editor. Otherwise, only the body field will use it.