We are a web development and hosting company and we use Dot Project. Its free, robust and exceptionally easy to use.

Its also offered as a hosted solution at Project Management Software

The hosted solution has made it extremely easy for companies to get setup. Once they sign up, its usually running within a few hours without any work on the clients side. You also get your own custom domain , I.e. yourcompany.smoothprojects.com

The project management software has domain addresses for test sites and is very flexible for adding custom fields for log-ins passwords etc. It has an integrated forum software for brainstorming so that the project itself doesn't get cluttered up. You can assign tasks easily and it has a permissions schema that you can easily allow a client to log-into to view your progress if you like.

Great Stuff!