In May of 2006, a committee was formed to assess the fundamental needs and opportunities in scientific software for x-ray data reduction, analysis, modeling, and simulation. This committee held a series of discussions throughout the summer, conducted a poll of the members of the x-ray community, and held a workshop. This report details the findings and recommendations of the committee. Each experiment performed at the APS requires three crucial ingredients: the powerful x-ray source, an optimized instrument to perform measurements, and computer software to acquire, visualize, and analyze the experimental observations. While the APS has invested significant resources in the accelerator, investment in other areas such as scientific software for data analysis and visualization has lagged behind. This has led to the adoption of a wide variety of software with variable levels of usability. In order to maximize the scientific output of the APS, it is essential to support the broad development of real-time analysis and data visualization software. As scientists attack problems of increasing sophistication and deal with larger and more complex data sets, software is playing an ever more important role. Furthermore, our need for excellent and flexible scientific software can only be expected to increase, as the …