Scott has published a list of his favorite tools. Be sure to check it out!
On top of the list is mentioned the Notepad2, which is my favorite Notepad -replacement for the reasons he lists. I also like the color coding for most popular syntaxes.
I don’t use so many other tools right now, but my favorite services and extensions that I use daily are:
- del.icio.us – for managing my bookmarks
- del.icio.us Complete -extension for the Firefox (for easy management of the bookmarks)
- Firefox’s Live Bookmarks that point to the rss-feeds of some tags (like News)
- Gmail Notifier extension (Firefox)
- Google Reader Notifier -extension (Firefox)
And of course WordPress.com for hosting this blog 
Sorry, Microsoft, Windows Live -services don’t cut it for me, yet. I like maps.live.com, though.
What are your favorite tools/extensions/services that you depend on daily? Which ones do you install first when building your development environment after fresh install? Comment here or link from your own blog 
