For my money... Lightroom.
Lightroom (LR) is built from the ground up for modern digital photographers who amass hundreds to thousands of images. Photoshop (PS) is designed for photography and graphics arts needs, thus is a huge application (and expensive) with many parts a photographer might never see. Working directly in PS also creates very large files and editing is pixel-based, meaning the changes you make in PS are permanently saved to file and cannot easily be undone or not at all (e.g. cropping - once it's done that's it, unless you create new files all the time). LR, on the other hand, only uses parametric editing, which means the original file is left untouched with the edits written to a text file, not unlike a recipe card. Edits can be revisited and revised at any point in the future including things like cropping, B&W conversion, lens corrections, plus all the processing, masking and adjustments you might make.
PS has Adobe Camera Raw (ACR) which does parametric editing like LR and it has Bridge for the "cataloguing" side of things, but, neither is as "complete" as the modules in LR are. PS, ACR and Bridge can be used (and still are used by some), but it is not as integrated a workflow as is LR whose workflow has been designed to specifically meet the needs of digital photography including:
- Library Module for importing, cataloguing (keywording, metadata, etc.) and exporting images - a hugely helpful part of LR that doesn't exist at all in PS (but does to a lesser extent in Bridge and PS Elements)
- Develop Module for processing images, with adjustments and fine tuning not available in Photoshop except through Adobe Camera Raw
- various modules for presentation including Print (simply the best workflow with Templates), Web and Slideshow (including PDF production) plus, in LR4, Book module;
- LR4 even has a Map module for geotagging images.
Plus LR is 1/2 the price of PS, However, LR does not:
- have a decent healing/clone brush (only "spot removal which can do a lot, but not as well as PS healing/cloning);
- merge photos to panoramas;
- merge photos for HDR
Photoshop does all of these tasks in 8-bit and 16-bit; PS Elements will also do these tasks, but only in 8-bit. Alternatively, there are a host of plugins that can be used with LR to accomplish these tasks and many others.
In fact, many photographers accomplish 80% or more of their digital photography workflow in LR (I use it for about 95%). Some choose to go to plugins for sharpening, B&W and/or a host of special effects. Others go to PS for those things.
Hope this helps.