As I mentioned in my skincare primer, the benefits your skin will achieve through the use of products has less to do with the actual product, and more to do with consistently using the product. You can get great results from products that you can fin in your neighborhood drugstore.
I have horrible skin. There, I said it. I still occasionally get acne, sometimes on my back and chest. I get ingrown hairs. I have Keratosis pilaris. Left untreated, my skin is dry, dry, dry. Like the post category suggests; I am a "product whore" (well, a recovering one now that I have actually tried EVERYTHING out there). Here's some great products I have found at the local drugstore that have produced great results for me.
Cleanser love.
What makes a good cleanser? For most skin types, we need something that will thoroughly cleanse (but not strip) off make-up, dirt and extra oil. And, most of the time, you just need a simple, yet great, cleanser to do the job. Here's a few I love:
Ah, the classic Cetaphil cleaser. At $12, you get a non-comedogenic, and fragrance free cleanser, that should be non-irritating for even the most sensitive of skin. Really looking for a deal? Then go with the Basis Cleaner Clean face wash; about $5.50. The Basis cleanser comes with me when I travel and am looking to downsize my make-up bag. Here's a secret: I even used it on a business trip to wash a pair of socks in the hotel sink. We all love products that can do double duty.
Other goodies: Aveeno Ultra Calming (great for sensitive skin) and Dove Facial Cleansing Cloths (the cloth is a great exfoliator).
Cream of the crop.
Before I found (and fell deep in love with) Philosophy products, I had searched and tried and exhausted myself looking quality (and price conscious!) facial products. What I found was almost so old-school, it was retro: Oil of Olay. They have several lines of facial projects, but I particularly love the Regenerist line. My favorites include:

The Regenerist Eye (about $18) has an amino-peptide complex that hydrates the delicate skin around the eye. I've found it very silky and cooling to the eye. I REALLY love the Regenerist Night (also about $18) is amazing. It's just the right consistency for a night cream. The other Regenerist products are equally impressive.
Runner's up: Neutrogena Healthy Skin Anti-Wrinkle Cream (great SPF for a day cream) and Neutrogena Visibly Firm.
What about acne?
For facial acne, I (along with TONS of others) have used Proactiv with success. My acne has never been horrible, and I found the 3-step system to be very drying for my skin. The Sister also has used Proactiv and found that if she just uses the cleanser once a day; it holds her acne at bay. One Proactive product that I still use is the Refining Mask. It's great for two things. One, it's a terrific weekly mask for cleaning out your pores, and two, it works well overnight on an acne flare-up. Just put a dab on the potential pimple, and in the morning you will see a reduction in the redness and overall appearance of the pimple. My kids give me funny looks when they see me in the morning, but it's worth it.
For the most part, I now can keep my facial acne breakouts to a minimum. However, it took me a long time to figure out how to keep the dreaded bacne (back acne) and chest acne (chacne??) at bay. I never broke out that much, just a pimple here or there. But still, hello, ANNOYING! Here's the system I found that has worked wonders for me:

For $6, Neutrogena Body Clear Body Wash provides you with a great, all-over body wash that contains 2% salicylic acid (a well-known acne fighter). It also comes in a scrub formula, and I use that one to two times a week. I then follow-up with Nature's Cure Body Acne Treatment Spray ($10) on my chest and back. It also contains 2% salicylic acid as part of its formulation. The neat feature of the product packaging is that the pump sprays from every angle, even upside down, making it easy to reach all the areas you are looking to treat. As a caveat, I must tell you that you may notice a slight increase in breakouts when you start this treatment. I read about it on the drugstore.com's site, so I was fully expecting it. This is often the case at the beginning of an acne treatment, as the products dry out the skin. Stick with it and you should see results.
Other acne resources: go check out acne.org. It's one of the best resources on the internet about acne. I learned about the causes of acne, different kinds of acne and some products that I had never heard of. Go there and take a look around for acne treatment reviews from "real people". You may find something that will work for you.
You have what? Keratosis pilaris?
Don't point fingers at me - you may have it too! Keratosis pilaris (we'll call it KP) is a very common skin condition often referred to as "chicken skin". Approximately 40-50% of the adult population have KP. Most people with KP don't know that they have it. While it resembles goosebumps, it is characterized by the appearance of small, rough bumps on the skin (usually on the back of the arm, although it can also occur in other areas). It's hereditary, and while it's not the most attractive thing in the word, it is harmless. Personally, I have it on the back of my arms and on the backs of my legs. Previously, the only "treatment" I found that would clear it up would be the sun, but now I know how bad that is for my skin in general. I scoured the internet looking for KP treatments. Most seemed lackluster at best and expensive. I then saw AmLactin products mentioned in a Glamour magazine column about KP, and decided to give them a try. The reviews at drugstore.com were positive and the price was right.

I started with AmLactin Moisturizing Cream ($13). I saw definite improvement in a few weeks by using it twice a day on the affected areas. The nasty truth about KP is that there is no cure; so you must continue treatments forever or the redness, bumps and irritation will return. After happily using it for about three years, I stumbled upon AmLactin XL Moisturizing Cream ($33). All hail the alpha-hydroxy! I have stubborn KP, so by moving to the more powerful AmLactin XL, I noticed a even GREATER improvement in the appearance of my KP. It's a bit expensive for body lotion, but it really works.
Speaking of body lotion.

Udderly Smooth ($4.50) is a great product with a funny name. Originally designed (and probably still used) for cow udders, it's a grease-less formula for really dry skin (plus, the maker uses the word "teat" in the product instructions and it always makes me giggle). My absolute FAVORITE lotion, based on the value and the results, is Jergens Ultra Healing ($7.50). I literally have bottles of this everywhere: on my desk at work, in the car, in my purse, on my bedside table at home. It's not greasy, and it has definite staying power - all for under 10 bucks!
Other creams of the crop: Jason Natural Cosmetics Body Lotion (70% organic) and Keri Original (the formula hasn't changed since I used it as a teenager).
Two random, but necessary items.

Eucerin's classic Aquaphor Healing Ointment ($6) is my go-to drugstore item. It works magic on diaper rash, chapped lips, toddler cheeks (when they wipe their nose with their arm and their cheeks get chapped from the moisture), scars, eczema (the one skin condition I don't have), etc., etc. I slather it on my lips right before bed and use it to reduce the look of scars. Plus, it's cheap, cheap, CHEAP. We keep several tubes around the house. The Flexitol Heel Balm ($11) has some of the most unfortunate packaging I've seen, but this stuff works amazingly well to make your feet summer perfect. Seriously, you'll see overnight results on your cracked or dry feet. The scent isn't great, but after using it twice a day for a few days, you can just apply it at night.
Other random favorites: Sally Hansen Cuticle Massage Cream (this sits on my desk at work and I apply it while checking my morning e-mail) and Jergens Natural Glow Daily Moisturizer (a favorite of many).
Now, you tell me, what are some of your favorite drugstore items?