Xerver (with php),
Notepad2 and 3 browser windows (opera, firefox, IE)...
Code, save, refresh browsers, repeat.
Once I have it the way I want, upload with
Filezilla.
If I have to do complex tables or image maps, I use an old copy of Dreamweaver 4.
Since a lot of my sites use various blogging platforms, when I am on a decent pc, posts are usually made with
Windows Live Writer.
If you have a blog based site, give it a try. It feels like typing directly onto your site rather than in a little post box. A very feature packed free WYSIWYG editor.
Has a lot of options for image insertion too, like resizing, drop shadows, watermarking, positioning, margins, linking options, uploading options, etc. And you can get a lot of plugins for it too.
Also allows you to compose posts offline and upload them later.
It is especially nice if you have a lot of blogs and/or using multiple blogging platforms, since it works with just about everything (blogger, wordpress, etc) and centralizes all your work in a single place. Much more efficient use of your time rather than logging in everywhere and making posts.
It also keeps a local copy of all your posts you make in it, so if you delete a post by mistake, you have a backup.