Just put up this list to share with others in the team so thought I might as well post it here since it could be useful to folks starting out in web development. Do feel free to add on to the list if there’s something useful for us to use.

Mind Mapping
XMind http://www.xmind.net/ (Thanks to @David_Shen for introducing this .. much nicer than Freemind! I use this for meeting notes, to-do lists and jotting down ideas)

Color Palette
ColorSuckr http://colorsuckr.com/
Color Palette Generator http://www.degraeve.com/color-palette/

On Screen Rulers
JR Screen Ruler http://www.spadixbd.com/freetools/jruler.htm
Pixus http://code.google.com/p/pixus/

Screen Capture
MWSnap http://www.mirekw.com/winfreeware/mwsnap.html

Hard Core Editing (i.e. know your markup)
Notepad++ http://notepad-plus.sourceforge.net/uk/site.htm

Firefox Addons
Web Developer Toolbar https://addons.mozilla.org/en-US/firefox/addon/60
Screengrab! http://www.screengrab.org/
User Agent Switcher https://addons.mozilla.org/en-US/firefox/addon/59
Firebug http://getfirebug.com/
Pagespeed http://code.google.com/speed/page-speed/

FTP
Filezilla http://filezilla-project.org/
Fireftp http://fireftp.mozdev.org/

IE Tools
IE 6 and 7 Internet Explorer Toolbar http://www.microsoft.com/downloadS/details.aspx?familyid=E59C3964-672D-4511-BB3E-2D5E1DB91038&displaylang=en
IE 8 has built-in developer toolbar

IDE
Eclipse http://www.eclipse.org/
Adobe Dreamweaver CS4 (it really does its job well, have tried hard to replace it without much success)

Wireframes/Design
Adobe Fireworks CS4 (started using Fireworks since Macromedia days and its my favorite program when a mock or design is needed)
Balsamiq http://www.balsamiq.com/ (Just started using this recently to improve my pen n paper process and its working out nicely)

Great reading for design/dev ideas
Web Resources Depot http://www.webresourcesdepot.com/
Smashing Magazine http://www.smashingmagazine.com/

Hope this helps you in your daily work. Happy coding!