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Both a hackintosh and a VMWare install can be used to develop iPhone apps. (I tried both, before just buying a mac for dev purposes). However, VMWare lagginess and bugginess is a pain even on a high-spec'd machine. And having a real mac is much nicer.

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Well that's very disappointing. I'm already getting an Iphone, but buying a mac as well would be too expensive/unnecessary. Perhaps there are modified versions of the necessary software to run on windows?

Don't get me wrong - if you are on a tight budget, a Hackintosh (if you can set it up) - is very usable. You might have to forgo some things, like working audio or wireless, but it will work well enough to develop iPhone apps if you have another main computer. Sadly, VMWare is impractical for anything serious, and XCode cannot run on windows.

You can grab a low-specced Mac Mini off ebay for <$300.

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