Since we last mentioned the Skim PDF reader and annotating application it has grown considerably and the newly released version 0.7 adds bevy of new features. Since that early release back in April they've added considerably to the markup and searching tools (including live search of the document with context in addition to searching just the annotations). There's also greatly expanded AppleScript support and a presentation mode. The crazy keyboard shortcut system we complained about before has also been simplified and improved. In short, Skim is getting better by leaps and bounds and is definitely worth another look if you regularly need to read and markup PDFs. While you can still only highlight PDFs with selectable text (i.e. PDFs that are not just scans), the anchored note and box features make marking up even image PDFs easier.
Skim remains open source and thus a free download from SourceForge.