We use Jira, but it is much more than a bug tracker. With Greenhopper, it offers us complete issue management, which includes iteration planning in stories and tasks. With FishEye it integrates a view on our subversion repositories into that, allowing crosslinks and beating the pants off of any other solution.

We switched to Jira after getting annoyed at Mantis once too often. We all had experience with Bugzilla, which is like using bow and arrow in these days of guns. We investigated for a bit, looked at Trac and FogBugz amongst others, but decided in favor of Jira, primarily because of Greenhopper. Issue management without decent planning abilities is like a blunt knife: usable, but unnecessarily hard. Haven't regretted it one single bit.