I own both an Amiga A500 and an A1200, but my coding is done on a Windows computer. It is easier to write code on a big high-resolution screen.
WinUAE, run in two separate instances, with a common mapped directory on the Windows computer for easy distribution of source-, object- and resources-files:
- one for compiling the code and making convertions of graphics etc.
- the other only for running te complied object, if the system chrashes I can have it rebooted in a few seconds (it only boots into the CLI)
- coding done in Sublime Text 2 and Notepad++ on Windows
- assembler: ASM-ONE v1.20 on Amiga
- Photoshop CS5.5 + Grafx2 (mostly used to get color indexes right) on Windows
- IFFMaster v1.0 for converting from IFF-files to RAW-imagedata on Amiga
A picture of how the setup looks on my screen: