This is really development on the cheap, but many people create amazing products with much less.

Hardware
B&W G3 upgraded with a Powerlogix 550Mhz G4 - and lots of disk
Ti Powerbook 550 Mhz G4

Software
Developed under OS X 10.2.4 and Quicktime 6.1

Photoshop 4.01 (how I wish I could afford a new version)

Bryce 4.1 (an OS X version would be nice)

GraphicConverter 4.4 - a truly remarkable program

Iconographer X 2.4 - another very useful tool

Microsoft Powerpoint - believe it or not, this is actually very handy for producing formatted text clippings !

TNT Basic 1.12 - The easiest language for sprite based game development on the Macintosh

Revolution (actually, the demo version)

and finally ... KuebSite for easily generating the new version of the web site

Just as a matter of interest, all of the working documents and versions run to a little over 2.2GB and 2,435 files and folders.