A long time ago, I had published a blogpost - “Tools of a SharePoint consultant”. Well, that article was so 2007. So, per one of the commenter's suggestion, here is an updated edition … drumrolll….. !!
1. Still definitely virtualize: Unless you are a masochist, you will end up virtualizing. Even within Virtualizing there are plenty of choices. I personally like to use VMWare Workstation 7.5 which I feel is a lot better than Hyper-V. Virtual PC is not a choice, since it won’t run SP2010 (64bit only). Here is a convincing screenshot -
2. A Powerful machine: I have, a laptop (Lenovo W510), with 16GB RAM, and Dual SSD. And a desktop with SATA3 SSDs and 24GB of RAM. I know it’s a bit extreme as of today (06/22/2010), but DEFINITELY Get an SSD, and DO NOT settle for < 8GB RAM. Preferably 12GB at least. Go for Core i7 processors.
3. Operating System: 64 bit Windows 7 on the host. I love windows 7, it’s awesome, smooth, stable, sexy. ‘nuff said! Has to be 64 bit though to access to gobs of RAM you will need.
4. The Virtual Machine: Pls refer my book, chapter 1, for the VM and how I built it. While you can develop for SP2010 on Win7, I still prefer to go Win2k8.
5. SharePoint Designer: Is a lot better now in the 2010 frame. Still icky sometimes, but way better than 2007.
6. And everything else mentioned here – A SharePoint Developer’s toolchest.