I use wampserver as local development server. Typically I use PHPMailer, Smarty, jQuery, Shadowbox and Google API's. Next to that are my cms, some custom classes and image packs.

When I started out i used Dreamweaver but there are plenty of other IDE's you can use such as Komodo.

I setup with Apache HTTP Server, MySQL 5, PHP all on my Win XP. An easier option may be Wamp Server. Id recommend Apache as you can learn about it's configuration at the same time as learning php.

I currently use phpDesigner. I like it cause its a very easy and light solution. I've used dreamweaver, but it definately lacks alot of features of an development IDE. I've also used Aptana and Netbeans. Both are pretty solid, but require a lot of resources.

definately agree. Theres alot you can learn by playing with apache, I personally wouldnt suggest doing it on windows, unless that's where you'll be spending most of your time.

I do alot of development for Wordpress, so I have a few themes, functions, and classes I work from.

I havnt had the time, but I my next plan is to learn Symfony (the framework), it looks pretty cool.

If your fast paced used dreamwever, because they help on closing tags in HTML

but if you really want to learn and feel the code (which is usually the best, best in the sense you have a total view on what you are developing) USE NOTEPAD or PSPAD.

Go to w3schools for tutorials and then the rest of the advanced codes is all over the net but I recommend you NETTUTS!

using DevPHP on home and thumbdrive, just because the same software runs on home and on a thumbdrive
have a wamp installation, to crash proof the software after the idea is (almost) working, to overload the database, code injection
some code from script sites
original claendar classes
and the Google code labs & APIs