I'm sure Illustrator will work for this purpose, but it is primarily a "drawing" tool. Probably good if you have artistic skills and want to design a cover from scratch. Photoshop, on the other hand, is an "image editing" tool designed for working with graphic files - digital photographs, scans, jpg's, gif's, tiff's, etc. Both programs have their place, depending on what you're trying to do, and what you're working with.
Once again, however, ALL of this is pretty high end stuff if you're just trying to make a cover for that bootleg CD you copied so you can tell what's inside the jewel case. In that case something like the software supplied with Stomper is probably more than adequate. It's pretty easy to use and cheap.