There was an interesting article in this month's Wired about David Heinemeier Hanson, the creator of Ruby on Rails and Jason Fried, his co-founder at his current company, 37Signals. They have a philosophy that simple is better. Interesting enough, one of their current applications is a project management tool called Basecamp, which takes this approach to running projects.
Contrast this with a colleague of mine in the middle of a big Planview implementation project. This is a large IT organization with a lot of projects to track.
So how much tool do you need? The folks at 37Signals would say to much complexity is a bad thing, even to the point of being criticized for not growing their tools. On the other hand, some organizations need a big application like Planview to support a complex organization. However, I've also seen companies implementing complex tools in a hope that is will fix a weak, immature process (it won't).
So start simple, get your processes in shape, and then bring in the bigger tools when you need them.