I used to work solely on a remote Dev box, using ExpanDrive to edit locally. I would have an ssh session open to run commands/debug/shell.

I've recently starting moving towards local Vagrant instances. I don't like dealing with local library installs on my Mac, and Vagrant makes it stupid easy to repeat my dev setup. It also gives me a good starting point for provisioning servers (using Puppet), thought I haven't fully consolidated the local dev and server Puppet manifests, yet.