It's certainly possible to develop on a Windows machine, in fact my first application was exclusively developed on the old Dell Precision I had at the time :)
There are two routes;
- Install OSx86 (aka iATKOS / Kalyway) on a second partition/disk and dual boot.
- Run Mac OS X Server under VMWare.
The first route requires modifying (or using a pre-modified) image of Leopard that can be installed on a regular PC. This is not as hard as you would think, although your success/effort ratio will depend upon how closely the hardware in your PC matches that in Mac hardware - e.g. if you're running a Core 2 Duo on an Intel Motherboard, with a NVidia graphics card you are laughing. If you're running an AMD machine or something without SSE3 it gets a little more involved.
If you purchase (or already own) a version of Leopard then this is a gray area since the Leopard EULA states you may only run it on an "Apple Labeled" machine. As many point out if you stick an Apple sticker on your PC you're probably covered.
The second option is the more costly. The EULA for the workstation version of Leopard prevents it from being run under emulation and as a result there's no support in VMWare for this. Leopard server however CAN be run under emulation and can be used for desktop purposes. Leopard server and VMWare are expensive however.
If you're interested in option 1) I would suggest starting at forum.insanelymac.com and reading the OSx86 sections.
I do think you should consider whether the time you will invest is going to be worth the money you will save though. It was for me because I enjoy tinkering with this type of stuff and I started during the early iPhone betas, months before their App Store became available.
Alternatively you could pickup a low-spec Mac Mini from eBay. You don't need much horse power to run the SDK and you can always sell it on later if you decide to stop development or buy a better Mac.