I've tried lots and my favourite by far is CD label designer from dataland software

It's worth the ($20 ?) registration cost. Most useful is that is works with any brand of labels, and the process for telling where to put the labels on the paper is really simple. It also does circle text sensibly, assuming the centre of the label is going to be the centre of the text.
It's easy to use and it does labels, tray cards and front cards if you want (the tray card is useful for the spine text feature)

Anahata