Mendeley, is a free research management tool that allows you to organize and annotate PDFs, insert bibliographies and citations into your research paper and collaborate in groups. Mendeley offers both desktop and web access, so you'll need to download the software to get started. It is available for Windows, Mac OS X, and Linux. Mendeley is free with an option to upgrade for more storage space.
To benefit fully from Mendeley, you'll need to use both the desktop and web applications.
Desktop Basics
The desktop version is great for managing a library of PDFs. Simply drag-&-drop PDFs into the desktop client tool while Mendeley extracts the citation information. Once PDFs are stored in Mendeley, the desktop application enables/supports simple annotation, note taking, highlighting and viewing. The PDF library, including notes, are a searchable library too.
Web Basics
The web application is great for accessing your library from any computer and for downloading citations when searching database. When downloading references from the web, simply use the bookmarklet to import the citation. The web application is also great for networking with other researchers with similar interests or for discovering research articles that others have imported.