Following the lead of Scott, here is my list of tools that I use, as well as tools that I have come across, but have not used (but that sound really cool). Tools may be listed twice if they fall into multiple categories.

Legend

• $ - Costs Money
• $$ - Costs Money and I have actually purchased (vs. using a free version)
• % - Have not actually tried yet
• Free - This product is free.
• * - Indicates a note about one or more of the above descriptions

• Internet
  • ie7Pro (Free) - Pluging for IE7 that adds things like spell check, ad block, download flash content, etc.
  • Simp Lite (Free) - Seamlessly encrypt your IM conversations using this program. The free version only lets you encrypt one type of IM (i.e, MSN, but not AOL, AOL, but not MSN).
  • Team Viewer (Free *) - Free for non commercial use. This is a remote desktop sharing program. Useful for those times when you play the role of tech support for family and friends.
  • WinSCP (Free) - Free secure FTP program. I use this for connecting to and transferring files to VMWare ESX Server.
  • YouSendIt ($ Free) - Free and Pay versions. I've used the free version to initiate, and receive large file transfers.
• Pocket PC / Smart Phone
  • PdaNet ($) -  Install on your computer and smart phone to enable your computer to user your smart phone as a modem.
  • PHM Regedit (Free %) - Registry editor for your pocket pc.
• Programming
  • Xsd.exe (Free) - Just because I have no other place to write this down, included with VS, and probably the .Net SDK, is the XSD.exe command line tool. It generates a class (partial class option) from xml or schema file for use with the xml serializer.
• Sql
  • SQL Internals Viewer (Free %) - Looks like a great tool for the serious DBA.
• Utilities
  • ISO Recorder (Free) - Shell integrated utility for making ISO images. You can make ISO's from existing CD/DVD's, or from a folder on your computer. It also support burning CD's and DVD's (Vista). The latest version supports Vista, and there are 64bit versions available. 
  • SyncBackSE ($$) - Sync, backup, restore files between a source and destination. I use this for keeping files in sync between by laptop and desktop, laptop and external HD, external HD and home computer. I've been using the free version for over a year and love it. I have finally decided to spend the $30 and purchase this product. $30 gives you a license to install on up to 5 computers, now that is a great deal. One of the licensed features I am taking advantage of is the FTP sync option to back up this blog to my local PC.
  • Virtual Clone Drive (Free) - Mount .ISO images (and .img images from MSDN). Works on Vista, and under Win XP as a limited user.
  • WinMerge (Free) - File and Folder diff tool. You can launch this directly from SyncBackSE
• Expression Media Encoder (Free %) - Encode rich media for Silverlight.