I get asked about this a fair amount, so I thought it would be a good use of a page. This is my work setup. When I am solving your problems I'll be using this.
About the setup:
2.8ghz quad core, 16gb ram, a couple solid state hard drives. I am using one apricorn pci card that has my boot drive mounted directly to it so I have SATA3 speeds. I like to use big clunkly IDEs and project-specific VMs, so I need fast disk reads.
I use the MacPro because I need to sometimes run multiple virtual machines. All of my projects are stored in their own Vagrant initiated virtual machines. Every web server setup is a bit different an accomplishing that using MAMP is pretty much impossible.
They are a bit of a mismatch and subject to change. but the center one is a Samsung P2770. This is a 1920x1080 27" Monitor. It is ok.. but it doesn't have a VESA mount which is why I am using a Wii box to bring it up to the same level as the rest of them. I'd eventually like to replace it with a Dell 2560x1440 monitor.
The left monitor is a fantastic deal! It's a Samsung 2343BWX that I purchased it from Microcenter. It has a resolution of 2048x1152 but in portrait it is 1152x2048. It is too heavy for the monitor arm so that's why it is propped up by some books.
The right monitor is a Dell U2412Mb, 1200x1920 also in portrait. This is an IPS panel. It works great and does have an adjustable stand that isn't attached. The colors on this are phenomenal.
I like to use portrait mode since I don't do a ton of graphic design and I like to see as much code as possible.
I had to buy an active display adapter to be able to run all 3 of these monitors at once.
I got it from a place near Orlando off of ebay. Pretty nice. Mine doesn't hold forward tilt but otherwise it works great. You can get a chair like this for under $300 if you shop around.
I use one private github repository per project. I also have time machine backups on an external drive.
Software-wise, I use the standard development stuff but I also use PHPStorm.
That weird thing on the right side of the desk
That is my GoPro HD hero 2 camera attached to a gorillapod. The orange block is a floaty back-door. I use this for snorkeling and sightseeing and creating embarassing videos of me falling off of my stand up paddleboard.