I've found that developing against a VM is a great tool for a dev. For OpenStack swift, we develop all of our code against a VM. Since we deploy on debian and I develop on a Mac, I can use OS X tools to develop (TextMate, etc) and code against an environment similar to our production. After code works on a VM, we can move to a lab or a staging environment to do more scale testing before deploying to production.

Developing against a VM is not something I did before working at Rackspace, and I find the practice so useful that I will do what I can to continue doing it no matter where I work in the future.