If you're developing for SharePoint, unfortunately you are stuck developing on a Windows Server box running SharePoint, or on a desktop running Windows Server in a virtual machine.
After the recent release of Windows Server 2008 (which I love by the way), a number of posts on the internet have addressed how to run Windows Server 2008 on your personal machine (e.g. your laptop). That makes sense for a lot of reasons, including the ability to run SharePoint locally and to use Hyper-V to run VMs (assuming your hardware supports it).
So if you're running Windows Server 2008 as your main OS, you should definitely search Google--there are a lot of guides to making it work, and everyone agrees you can do pretty well with it--and the rest can go in VMs, right?
There are two things I've run into that are harder to find answers to online (not impossible, just harder) so I thought I'd bring them to light here.
First, of all things, the Windows Live applications don't install on WS2008. Go figure! The "Windows" in "Windows Live" I guess doesn't mean all versions of Windows... though it should. Even more interesting: The apps run, they just don't install. So I found that if I took my Windows Live Writer folder (out of Program Files) from my Vista laptop and just copied the folder on to my WS2008 box, it just worked! Slick!
The second problem is one I've not yet found an answer for, so I'll throw it out to the community. As soon as you enable Hyper-V, you can no longer put your laptop to sleep. That's a big deal, particularly for me. There's got to be some kind of hack. Let me know if you find one!