I've never used a CASE tool for code generation (implementation) but use then extensiverly for Analysis & Design - especially for State Machines.

As Oliver says, once the Design is captured, this makes coding & maintenance much easier.

The minimum tool requirement is just a Diagram drawing tool - such as Visio.
Note that I distinguish such a "Diagram" tool from a Paint tool, in that it must understand Connections - ie, if you connect 2 blocks on a diagram, then you must be able to move the blocks and have them stay connected.
What I call "Paint" tools do not do this and are, therefore, of very little use here, IMO.

One advantage of such a simple Diagram tool is that it doesn't impose any particular diagram sytax or style - so you are totally free to do whatever best fits your particular application at hand.
The disadvantage, of course, is that it provides no support or checking for you...

I'm currently using Enterprise Architect, which seemed very reasonably priced to me:
http://www.sparxsystems.com.au/products/...index.html

I've used the trial of IAR's VisualState - which is (as the name suggests) specifically for state machines. It seemed very good - but very expensive!

I beleive there are now free plugins available for Eclipse...

This has been discussed a few times before; eg, http://www.8052.com/forum/read/128718