I’m thinking about trying some development for the iPhone, is it possible to install Leopard inside VMWare? I already have a pretty high spec PC with a comfy setup that I’d like to use, or do I need to buy a real Mac?
Legally, you need to buy a Mac. It is "possible" to run (at least Tiger) in VMWare -- the experience is not optimal, but you can do it. It's also possible to run OS X on PC hardware; however, it's an exercise in illegal software and hacks.
See related discussion at http://stackoverflow.com/questions/22358/how-can-i-develop-for-iphone-using-a-windows-development-machine
Unfortunately, there's no legal way to run OS X in a virtual machine.
For developing iPhone apps you probably don't need a particularly beefy machine, so maybe look into grabbing a mac mini? They're the cheapest Macs you can get, and should probably be just fine for doing iPhone work. Plus, now you have a mac that you can use for testing other things too! :)
I've run OSX under VMWare, and I can tell you with confidence that it is not an environment that you would find comfortable for developing applications in. It was barely (not really) usable for testing Mac specific browser bugs that couldn't be reproduced in Safari on Windows.
On the other hand, if your hardware is supported by OSx86, you can run it natively at reasonable speeds, and I would expect it to make a fairly nice dev environment.
For all cases, I'm going to assume that you have a legal OS X license, and don't mind the legal ambiguity of running it on hardware which the license explicitly forbids (the legality is unclear, imo, but I really think you'd be ok as long as its not a pirated copy).
@jsight - I don't think the legality is unclear. Additionally, you can not take a retail copy of OS X and install on PC hardware -- you need one of the many modified versions. This comes of course from a guy who's experimented with just such software. I now have 3 Macs in addition to my PC at home and run Windows on Macs as well.
It is legal to run Mac OS X Server in a virtual machine on Apple hardware. All other forms of Mac OS X virtualization are currently forbidden.