It really depends on what you are doing but I generally find it easier to work on a computer with a nice big LCD monitor and it needs to be fast enough to be running a few things at once, other then that I really can say.

2 monitors. Screen real estate is like money; while it's possible to have too much of it, most people never run into that problem.

I would have to agree that Monitor and input devices matter the most, and I think in terms of computer specs as long as your development machine can run your final product your going to be okay.

I am always interested in posts like these. My personal computer and the only one I am using to develop my little RPG project is a Netbook. I don't use an external monitor, and I do my development on the couch in the living room.