As more and more .NET developers are beginning to develop custom SharePoint assets, a few common questions continue to be How do I set up a development environment? and What tools do I need? Now, I know that beauty is in the mind of the developer and unfortunately size does matter. Different size organizations have different policies but there are several requirements any environment should have. Here is my own 2 cents in on a few aspects since I know a lot of folks don't want to read a lot of documents....I'm not sure what they do between 12:00 am and 6:00 am but it's definitely not reading. But, again, these are my own 2 cents. Check out the references and you will get a more complete story from folks much smarter than me. I've also include references for tools you should also install.
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Environment Requirements and Overview
Setting Up Development Environments for the 2007 Microsoft Office System
Implementing Microsoft® Office SharePoint® Server 2007 and Windows® SharePoint® Services 3.0 Solutions
Team-Based Development in Microsoft Office SharePoint Server 2007
Development Tools and Techniques for Working with Code in Windows SharePoint Services 3.0 (Part 1 of 2)
Development Tools and Techniques for Working with Code in Windows SharePoint Services 3.0 (Part 2 of 2)
Building the Virtualized Environment
Use Virtual PC Differencing Disks to your Advantage
MOSS 2007 Development - Virtual Server Set Up
How to Create a MOSS 2007 VPC Image - the Whole 9 Yards
Configuration, Tools and Processes
SharePoint Development Environment Modifications
STSDEV: Simple Tools for SharePoint 2007 Development
SharePoint Project Utility Tool Window
SharePoint Server 2007 SDK: Software Development Kit
Windows SharePoint Services 3.0: Software Development Kit (SDK)
Using Visual Studio 2005, MakeCab.exe and MSBuild to Create Window SharePoint Services v3 Solution Files (*.WSP's)