My favorite server software is the open source combination:
OS: Linux
Webserver: Apache
Serverside Script Language: PHP
Database: mySQL

For local development purposes I prefer
Appserv which is a Windows Apache/PHP/mySQL environment.
Editor: phped [2.96, an older freeware version]

Other Apache/PHP/mySQL software solutions for local development:
Phpdev
Xampp (apachefriends.org)


PHP Designer 2005, a free PHP editor
PHP documentation