Things change rapidly in the WordPress world. The content in this post is more than a year old and may no longer represent best practices.
The WordPress.org list of recommended web hosting companies
Gallery of free themes at WordPress.org
WordPress Codex on using themes
Theme Forest (inexpensive WP themes)
StudioPress professional WP themes
Explanation of WordPress Widgets (and how to make a theme widget-ready)
Learning CSS (from the W3C site)
Artisteer theme design software
Windows Live Writer offline blog editor
Ecto offline blog editor (for Mac)
FileZilla free FTP client
FireFTP free FTP client
FireBug web development plugin for Firefox
MAMP for setting up a WordPress install on your Mac
XAMPP for doing the same thing on Windows
BeeDragon Web Services, Lori’s company, for expert development help
The Podcast Asylum
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