<p>We are a small company and would like to know the best possible (and affordable) hardware and software configuration we ought to be using for our development environment. At this moment we are a team of four people who work remotely from different locations and each one of us uses a laptop and ADSL connection to work on our projects.</p>

<p>This question should help us identify a path towards optimizing our hardware and software so as to make the most of these development environments. Do we need to run everything locally on the laptops or some sort of distributed solution is possible? Which software versions do you recommend given that both Windows 2008 and SQL Server 2008 are available options? Do we use a central server or run these locally on our laptops? </p>

<p>We're a young team so any help would be welcome and much appreciated! Thanks!</p>

<p>Ym</p>

For a team, I would suggest that you set up the local environments (laptops) as development environments, with a local DB copy and running CF developer version.  Version control (VSS, Subversion, Git, etc.) is pretty much mandatory.
Have a testing/staging/QA server with the same configuration as the live version (as much as this is possible).  It should have its own CF license to follow the licensing agreement.  You should put checked-in code here for everyone to test and to check integration.  Several version control systems offer ways to automate this, or you could do this manually.
Production, obviously, should be its own thing.  I would suggest that you separate the database and app/web server on two separate boxes.
I know this might be a little more/less than you were asking, so feel free to ask for clarification.