Most frequently used software:
Debian, xmonad, emacs, rxvt-unicode, conkeror, bash, git, perl, ghc, xmms2. Gnus for email, rcirc via irssi-proxy on a remote server for irc, bitlbee (via irssi) for Google Talk and AIM. Github and Gist for collaboration. (Github is such a good tool that I pay for it, despite not needing any of the paid features! Irrational!)
The idea is to reduce overhead; anything I want to do is always a keystroke away. Most of my time is spent working or relaxing, rather than fighting with my setup. It Just Works, and is easy to interactively fix. (Want a different window arrangement? Just code it and hit Mod-Shift-q. Want an Emacs utility? Just type it in and hit C-M-x. Easy. No overhead.)
Hardware:
Intel i7 (4 cores), 30G SSD for /, 1TB 3-way RAID-1 for /home, 24" Dell monitor, Embody chair, crappy desk, and iLift monitor mount. Topre Realforce 87U keyboard. HeadRoom Micro DAC/amp (fed from the digital output of an old EMU10K1 sound card) and DT880 headphones.
It will be the perfect setup when I get a Steelcase Airtouch desk, Ultimate Ears custom headphones, and a 30" monitor. First I need to win the lottery :)