My CD burning/storage machine is a 90mHz Pentium that still has the FPU flaw. It has 64 mb. RAM, which was pretty good when I bought it in 1994. It runs Win95 sr2 and NT 4 sr6. $6,500 when purchased!
My database server development machine is a 300 mHz. PII with 128mb. RAM. It runs Win 2k adv. server and SQL Server 2000. Got it in 1997. $3,500 when purchased.
My primary machine is an 866 mHz. PIII with 1 gig. PC800 RDRAM. Got this one in 1999. It runs Win 98SE and Win 2k pro. Close to $7,000 when purchased.
The only thing that makes these things usable is they all have SCSI cards (top of the line Adaptec when purchased) and Seagate 10,000 RPM drives, as well as RETAIL components, such as the video card, CD-ROM/DVD drives, NIC, etc. That means there are still driver updates available for most of them (unlike OEM cards).
I make my living developing software, but I'm hardly living on the edge as far as tech. I neither own nor want to own a laptop, cell phone, PDA, or pager. But I can see their usefulness for certain people.
Anyway, I got both the PIII and PII for free, so I can't complain.
When it gets to the point that I'm spending more time compiling than developing, I'll upgrade to a new machine. I figure a couple of years or so.
You don't need to latest and greatest to get the job done!