Sharepoint Tools

WSP Builder
wspbuilder - Sharepoint solution package creation tool for WSS 3.0 and sharepoint 2007

Log viewer
ULS Log viewer - Must have tool if you are developing custom webparts/fields/ etc. Helps you to easily take a look at the log files and tells you what went wrong exactly.

CAML Viewer
CAML Viewer - Good tool to view generated CAML queries, will be useful if you are using SPAPI/SPServies. You can also use this tool to get the GUID of the lists/views.

SPServices, SPAPI
SPAPI - Great tool if you want to hack sharepoint with your javascript foo (SPAPI - seems to be outdated, no longer maintained, still it works).

SPServices - Kick ass tool built on top of Jquery. Makes calls to sharepoint's asmx webservices and does lot of magic.

Supplementary tools
Firebug - Must have tool if you work with SPServices/SPAPI

Javascriptlint - Use this to find out syntax errors in your custom.js file. Sometimes firebug won't load the js file, if it has syntax errors.