The tax credit (and it is a credit, not a deduction) is definitely a great bonus for first time homebuyers, although any financial benefit obviously won't be derived until the following year. It offers an incentive for buyers thinking about a first home to move forward with those plans now rather than waiting, as it is only available to homes purchased from Arpil 8 of this year, through July 1, 2009. (Note: A first time homebuyer is considered to be anyone who hasn't owned a home in the past three years)
Something to keep in mind is that is actually more of a "loan" than a gift, as it will have to be repaid over the next 15-years ($500 a year), or repaid in full upon the sale of the home.
Another portion of the bill that first time home buyers should be aware of, is that downpayment assistance programs that currently allow sellers to contribute the 3% downpayment requirement for FHA loans will be eliminated by October 1, 2008. From that point, buyers will have to come up with the 3% themselves.