Is there really good distortion correction software?

Yes. It is really pretty good, but it can not solve some of my problems. In particular it cannot force lines that should be parallel into being parallel.

Yes. the Transform functionality is CS5 is flexible enough to do pretty much anything, but it will not transform curved lines into straight lines automatically or semi-automatically (PhotoNinja will do that) nor force parallel lines back into being parallel (PhotoNinja will not do that).