Local: OS X, Ruby on Rails, MySQL (didn’t want to go with the default SQLite), Mongrel, git. I develop and test locally. With each new change I commit to git and when done I do a push to GitHub.
Version control (also remote backup): GitHub. If you are doing an open source project it is free to host on GitHub. You get version control, a remote backup of your files and a great web interface to view files, trees and a feed with changes from fellow developers.
Server: A slice on Slicehost with Ubuntu 8.10, Ruby on Rails, MySQL, Apache with Phusion Passenger (mod_rails), git. Occasionally I do some changes directly on the server but usually I just do a pull from GitHub with changes done locally. Domain is registered and managed with GoDaddy (cheap and ugly, though their admin interface is not that bad).