RefWorks is a wonderful tool for graduate students.
Those who are writing a dissertation or thesis will find it helpful for arranging the many citations needed.
RefWorks is available anywhere there is internet, so if you are commuting between school and work or school and home RefWorks can keep your research together in one spot.
You don't have to worry about backing up your citations and research (though you should keep a copy up to date just in case) because RefWorks will back itself up.
In short, RefWorks is free, portable, and highly useful.
First, create an account (look at the First Time Users tab for more info).
Second, while you're doing your research make sure to import citations into RefWorks (this is very easy from article databases, such as EBSCO, which have an Export button which will export to RefWorks smoothly and quickly; if you're importing a book or website, you'll want to manually import the information).
Third, once you've done all your research and imported all your citations, you'll be ready to write your paper. You can download Write-N-Cite (see Write-N-Cite tab for more information) and use it to create your in-text citations or footnotes as well as your bibliography.
If you're not using Write-N-Cite, at the end of writing the paper, login to RefWorks and select Bibliography. You'll want to create a bibliography; make sure that you're creating it using the style guide that your professor or advisor requires.
That's it--you're done! Just make sure to check over your bibliography and citations for errors (especially if you're using APA 6th edition).