Depending where I'm at, I use one of three machines to develop:
Machine 1 (at work): Dual-processor Quad-core XEON E5320 1.86ghz
4GB RAM
1.5TB HD (raided for performance through 2x750gb SATA)
Nvidia Quadro FX4500
Dual monitors (one 22" wide, one 19" square)
SQL Server 2008, Photoshop CS3, full Expression 2 studio, Visual Studio 2008, Vista Ultimate 32bit SP1 (want to upgrade to 64, just takes a long time to repave my machine)
Machine 2 (laptop for work): Core2Duo T7500 2.2ghz
3GB RAM
7200rpm sata 200GB HD
GeForce 8600M GT
17" widescreen + 22" widescreen when telecommuting
Visual Studio 2008, SQL Server 2008, Photoshop Elements 3, full Expression 2 studio, Vista Ultimate 32bit SP1
Machine 3 (home pc): Core2Duo E6600 2.4ghz
4GB RAM
300GB SATA, 2x500GB SATA (none raided)
GeForce 8800GT 768MB
20" primary monitor + 22" widescreen
Visual Studio 2008, 2005, SQL Server 2008, Photoshop 7, full Expression 2 Studio, Vista Ultimate 64bit SP1
It goes without saying that my desktop at work performs the best, but honestly they are all dang fast. I'd like to up the RAM on my home PC since I am running Vista 64... though I honestly don't need it. Just be to make me feel all warm and fuzzy inside.
*EDIT*: I also extensively use VMWare to create images for several different setups such as Windows Server 2000/2003/2008 and XP. Great for testing all sorts of browser combinations, etc.