Welcome to Fpweb.net! I would strongly recommend creating a second Sharepoint environment (if hosted, a second wss corp 1 plan) so that your changes do not effect your production environment. Keep in mind that all of our new Sharepoint servers run Windows Server 2008 x64. The best and easiest way to perform Sharepoint development is directly on a sharepoint server (with matching platforms and patch levels as the production environment). I prefer to have a local Sharepoint virtual machine running on my desktop as i code and test with Visual Studio 2008 installed. This way i can create the deployment files, take a snapshot of a vanilla sharepoint install (or current production state) and test the deployment as well. When deploying any changes to your environment I would strongly recommend running an stsadm backup of the site, backing up the 12 hive, and making a backup copy of the sharepoint web.config. If you decide to make your new server a dev environment you’ll need to purchase Visual Studio 2008 (or download an evaluation copy directly to the server). There is a Visual Studio Extensions for Sharepoint that you can then install which will provide you with some templates and deployment project wizards. Let me know if you have any more questions!