I'm a graphic designer and a web developer and am VERY partial to adobe products, will I be able to run the adobe suit on linux and still have full functionality?
I like my games, I have a lot of them on Steam. Will they work on Linux?
You're definitely going to want to keep a Windows computer around for these two things.
I agree; keep windows for those things. If you have more than one system, you can use one for *nix and one for windows. If not you can dual-boot like previously suggested or run a VM. You can run a windows VM inside *nix, or vice versa.
This command line stuff scares me, how often will I need to use it for personal computing needs?
You can probably get away with not using it very often at all.
Is freeBSD the right choice? Or are there other suggestions you'd like to offer that are as cost-effective?
I don't think you'ld like FreeBSD if you're afraid of the command line. Hopefully Daemonguy will catch this thread and have something to say about it, but from what I understand FreeBSD is generally for power users who tend to prefer the commandline over GUI.
I can't really suggest anything, but I can say I'm happy with Ubuntu for my Linux needs.

Well, while I would love to tout the benefits of FBSD over Linux, FBSD *can* be daunting for the initiate. It also sounds like you need more of a desktop environment, and where FBSD really shines is as a server. You can try PCBSD, which is a packaged, GUI installed version of FBSD with a nice front end (comprised of modified KDE 4.x). What's handy about it, is that it provides you an opportunity to dig as deep as you desire into real Unix without *needing* to. The latest version which makes use of FBSD 8.x is in RC, but very stable thus far for me.
That having been said, you might be more comfortable with some flavor of Linux. The only problem I have with Linux is the disjointed nature of the thousands of threads it has taken. YMMV.
Course, I love the command line control and favor BSD style *nix over System V.
The biggest problem right now is that I have xp, only able to use 3.5GB RAM. I don't want to spend THAT MUCH money on Win7 to run 64 bit to have more RAM. Is linux capable of 64bit processing, and therefor more RAM (I have 8GB DDR2 laying around waiting)?
I know there is a 64-bit version of Ubuntu, I had it on this computer before. I ended up wiping 64-bit from this drive and now use the 32-bit version of Ubuntu on this 64-bit machine. 64-bit Linux and Flash player don't play nice.
Ironically, I don't think you would be able to use many of the things that would even utilize all of the available RAM with 64-bit Linux because things that are generally memory intensive like multimedia editing suck on Linux. The extra RAM might come in handy for using WINE to run Windows applications though, assuming the applications you want to run aren't currently broken in WINE. WINE doesn't always work.
There's version of 64 bit Linux and FreeBSD, so that's not a problem I have run 64 bit FBSD without problems, but as joebert pointed out, it takes work to make it right. It would help with wine, but processor control is flaky I think. You would be better off with a dual-boot or VMware installation.
Perhaps a win7 install using 64 bit and a vmware install of 64 bit *nix? Don't quote me on this, but you may even be able to run 32 bit *nix within a VM session on a 64 bit host.
I have a couple pieces of hardware that I'm worried about drivers for. Webcam, wireless adapter, external HDD. Will these work on linux?
Flip a coin and have your girlfriend pick a number, if it's heads and her number is odd or it's tails and she refuses to pick a number, it might work.
Ubuntu has been pretty good about working with my
older hardware, but any time I've bought something new I've had to jump through hoops to get it to work.
Everything with *nix takes work to make it right. While it can be a challenge, that is not necessarily a 'bad' thing. The ability to self-optimize is one of the benefits of the operation environment.
My school runs MAC and I have to send in zip files of my schoolwork for my online courses. Can linux create the .zip extension?
Yes, you have nothing to worry about here.
In relation to the previous question, is openOffice my only choice for the Office suite? Is it compatible with MS Office?(that's what the school runs)
All I can say is I like OpenOffice. It works for me.
If you know MAC you essentially know FBSD -- at least over the covers. OSX is really just the mach kernel with darwin packaging wich is a fancy way of saying a small fbsd kernel and the surrounding environment. I understand you can even download the ports tree on a Mac, and install ports native to FBSD on a Mac, though I have never verified this myself.
I too love OO.Org.
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Don't "switch" to Linux, that would probably be a big mistake in your case. Instead, start using Linux but don't get rid of your windows computer.
I have both Windows and Linux on the same computer, both have their own drive and I like it that way because I can use the BIOS to decide which OS boots and I don't have to fiddle around with boot camps or worry about one OS hijacking the boot sector from the other.
I concur. A dead swap will do nothing more than frustrate you and make you feel as though you need ot 'hurry' to get it up to speed. You need time to get involved with the methodologies that *nix's employ. Conceptually, it's vastly different from Windows; 'everything is a filesystem' is a hard thing for people to get their mind's wrapped around.