Microsoft says that Visual Studio 2008 can be installed on any version of Vista (excluding started edition).
But I am not sure, if Home Editions cause not problems with debugging, virtual machines, IIS, MS SQL 2008 and all other tools which developers use or with some old tools like Visual Basic 6.0.
Seems that Vista Business would be the best, but Home Editions are much more popular.
Or, the would be stay with Windows XP Pro?
If you need Windows Authentication you need Vista Professional or above.
I've been using Vista Home Premium as a development machine and I haven't had any problems with it + Visual Studio 2008 Standard Edition, although I haven't had the chance to try using IIS debugging (I just stuck with the ASP.NET debugger).
I would recommend you to stay with Windows XP Pro. I worked for a short while with Windows Vista (not sure of the edition) with Visual Studio 2005 and it took about 2 days to get back to my XP Pro. I could really not put a finger on it but I just didn't like it. Although, I would prefer linux (specifically Ubuntu) over windows any day.
I'm also thinking of installing Vista (64 version), need to verify the drivers support. Been running Vista Ultimate 32 bits without problems for more than a year in 3 machines.
@Vagmi
I just don't like tomatoes but I cannot put my finger on it. That said, I don't recommend you to eat bananas.
You should be able to pinpoint your problems in a specific question like this.
If you are (like us) migrating your current software from VB6 to C# I would use Vista 32bit (at least Home Premium Edition) or continue with XP Pro I think it is Aero that makes creating and moving objects in a form in VB6 painfully slow. I recently developed for two days in XP Pro and VB6 ran amazingly fast (1GB memory in the XP machine compare to 2GB in Vista32) The reason for not liking Vista 64 (that I uninstalled) is because when you write to the registry it writes in different place than you expect it and it was causing lot of trouble. Also, when you have programmed for many years you accumulate lots of little tools (some of them 16bits) that won't work in 64bit, and you can get attached to these little tools! I don't mind about registry entries, but when I saw that my little Spanish dictionary didn't work in 64 bit I uninstalled Vista straight away...
I have used VS 2005 and 2008 on Vista 64 Business.
No Problems, runs like a scalded ape on my modest hardware. AMD dual core, 2 gigs of RAM.
I think a lot of the anecdotal evidence is going to be pretty badly skewed towards "I'm afraid of change." Not trying to be offensive, but I think people's expectations cause them to throw their hands up in the air and give up at the first hiccup.
Not that I am an MS fanboy. I'm actually more of a Linux fanboy. I just don't see Vista being any more of a PITA than XP. It's actually noticeably faster on my machine and several others I have converted.
If you do have an MSDN account just go out and try it. Dual Booting is easy, my main machine is set to triple boot.
If you want a quick dirty comparison of the differences in price brackets, you can look here.
http://www.microsoft.com/windows/windows-vista/compare-editions/default.aspx