Writing as an absolute newbie with no prior musical knowledge I can highly recommend the Gibson Learn and Master GUitar DVD course. Steve Krenz is the instructor and does a great job of building basic skills, beginning with individual notes on each string to open chords, then barre chords and beyond - taking the student from zero to intermediate in a very well laid out program. You begin reading standard inotation, not relying on TAB from the very beginning.
The online community that is included as part of the package is as valuable as the lessons themselves. Steve Krenz posts often, directly answering questions, as well as getting lots of good feedback and encouragement from other students.
Other resources - Justin Sandercoe has also been a great help, but I'm committed to the Gibson/Legacy Learning program, with help from some friends at church who play as well.