I recently signed up for a drawing class with a few fellow AFARians, and I came to this art supply store—near Jackson Square in the Financial District—to stock up on materials. Sporting wall-to-wall color and two floors of pencils, paints, charcoals, papers and just about anything else you can imagine, I left with my arms full. The customer service is excellent, and if you're taking a class, mention you're a student for a discount.
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In the hood at AFAR SF: Artist & Craftsman Supply
This art store hidden on a quiet street in Pacific Ave. has everything (usually), and the staff is very friendly and helpful. There are all sorts of handmade papers in their basement, which isn't totally obvious when you go into the store at first, but you can probably spend 2 hours down there.