We prefer to do our development using Mozilla Firefox with the Web Developer extension. Granted, we test against IE 7 as well in office, and you might be interested to know there is a handy developer toolbar add-on for IE 7 that rivals the functionality of the Web Developer extension.
It's just not as pretty. We like pretty things, even if Ãœbercart isn't that pretty yet. So, we stick with Firefox and take full advantage of the DOM browsing/highlighting/outlining functions and CSS helps while developing. We recommend you do the same...
Web Developer extension for Firefox:
Firebug Debugging Add-On for Firefox:
Tamper Data (HTTP/HTTPS Header Tool) Add-On for Firefox:
Developer Toolbar for IE 7: