Ask My Readers: Development Environments

I thought I'd turn things around a pick and ask my readers for some advice on particular topics. Today's topic is Development Environments.

Currently, I run Zend Server Community edition on my laptop to match what we're using in production (except on the new production games platform server, where I am running Nginx + Apache and not using ZSCE) but have been rethinking this for no reason other then "try and make it better." One thing I have thought of doing is to use virtual machines on my MacBook to accomplish this. I have Virtualbox, and I use it to test things once in a blue moon on IE7 and IE8. Given that it takes up a lot of space I have been thinking to either use it or get rid of it.

Do any of my readers have experience with doing development work using localized virtual servers? Keep in mind that I am using The One True Editor so I would have to be able to edit code in the virtual machine from my laptop (best case) or on the virtual machine (worst case).