There is no simple answer, of course, as there're plenty of software packages and you will probably get different suggestions here.
As you already have some experience with neuroimaging data analysis, I would generally recommend using software that you are already familiar with (SPM/FSL?).
Currently, I do my DTI analysis mostly in FSL and Tracula (Freesurfer implementation), depending on whether I want to run it voxel- or ROI-wise. The first one (TBSS in FSL: http://fsl.fmrib.ox.ac.uk/fsl/fsl4.0/tbss/index), I think, is substantially easier for beginners, but if you're already familiar with Freesurfer and comfortable with shell scripting - then I would suggest Tracula.
If you like python, then you might be interested in looking at Nipype (http://nipy.sourceforge.net/nipype/index.html), which is a meta-package with a possibility to combine multiple toolboxes into one workflow. It also has some ready-to-use pipelines for DTI.
Recently, I was at the course, where we also had BrainSuite lab (http://brainsuite.loni.ucla.edu/). The software is well-documented and seemed relatively straightforward to work with as well.
Finally, I heard some positive feedback from people working with Camino (http://cmic.cs.ucl.ac.uk/camino//index.php). Haven't tried it myself so far, but I think I will, as Nipype has a pipeline, combining it with Freesurfer.
I would recommend to use FSL. Depending on the type of question that you'd like to pursue, TRACULA could be a useful addition to it. I think FSL provides most comprehensive sets of tools for DTI/fMRI/sMRI analysis. In general, you may want to learn something most widely used.
I would like to add a note to Alexander's suggestion saying that if you like Python, there is an excellent but fairly new software package called Dipy (http://nipy.org/dipy/), which shares a community with Nipype. To me, it felt more intuitive than FSL or any of the other software packages I tried, but that may be a personal thing. It also allows for easy interfacing with FSL and other software packages for pre-processing steps such as eddy current correction.
The answer to this question depends heavily on your kind of analysis. Which kind of diffusion model will be used? is tracking involved in your analysis? In principle combining different tasks of different software packages is easy to do. But as Jiook suggested, FSL has all tools to do DTI processing from preprocessing up to statistical analysis. However, TRACULA belongs to Freesurfer, not to FSL, but TRACULA processing uses tools (e.g. probtrack) from FSL.
Can anyone suggest good software for DTI analysis of peripheral nerves ( i want to do it for upper limb) and would be grateful if someone would recommend useful tools for it. Thanks.
I Agree with Markus, DTI Studio is a very nice and easy tool. If you are a Windows user it will be a good starting point because FSL does not work natively under Windows and a Virtual Machine must be use.
I have tried several softwares,including SPM, FSL, DTK and ExploreDTI. I found that FSL worked the best and its realy convenient, then ExploreDTI is also fine in DTI processing. But if you want to do fiber tractography analysis, you should notice that FSL only do probabilistic tracking.
I agree with Dr. Alaminos, however it would depend on the final goal. If your goal is to perform manual dissections of white matter tracts I also recommend to use the TrackVis, you can get it at http://trackvis.org/.
It allows to perform the manual dissection and get lots of stimates for statistical analysis such as FA, MD, RD, Streamlines and volume values.
I tried FSL, DSI studio, TrackVis, BrainSuit, ExploreDTI, Medinria, and PANDA. Each software has its pros and cons, but I found that Medinria is the easiest one for the tractography especially version 1.9.4