I'm in the UK and use Kashflow (http://www.kashflow.com/ or http://bit.ly/kashflow if you're feeling affiliate-link-friendly) -- it's been rock-solid and has plenty of hassle-reducing features beyond the usual invoicing and book-keeping stuff, including inbound online client payments and good VAT support with automated return submissions.

My accountant also has access and it makes that side of my business very very easy to manage.

They've recently dropped their prices (now £5/mth and up), but it should say something about KashFlow that I've been happy to pay the old price ( > £100/year) for it for the last three years.