When I was researching graduate programs last fall I was thinking about a Masters or PhD in Psyc. After talking to several people w/degrees in the area this is the summary...
People said the PhD was not really necessary unless you want to be heavily involved in research and testing. They said there is actually more hands on work with the Masters....that this is what most counselors have. It really depends on the level you want to take it to. Do you want your own private practice? You can charge more w/a PhD but can do it w/an MS (depending on the laws of your state). Are you interested in research or teaching at the college level? Then you definitely need the PhD. Want to work in a facility and be able to provide therapy? Just get the Masters. It really depends on your long term goals. You might also want to consider a degree in Marriage and Family Therapy. It's actually a GREAT program that really teaches you counseling and therapeutic techniques. Several counselors here at work have their degree in this. And actually the MS in MFT is generally more respected in the workforce than the MS in psyc. (from my experience) b/c people know that the MFT people get a LOT of good, hands on training.
Hope this helps
Feel free to PM me if you'd like to talk about it more! Good luck with your decision.