everyone seems interested in building IPhone apps today. Do you have to have an iphone to build an app? Is there a development / test environment that simulates the iphone experience to avoid having to purchase one.
if yes, what are the next steps in moving forward on this?
If you plan to release your app on the Apple store, then it must be developed using Apple's iPhone development kit. The development kit is available for download from their website. (You can use various open source dev kits that will allow your application to run on "jailbreaked" phones.) I think you have to join the apple developer program as well -- around $99 or something.
The wrinkle is that the dev kit only works on the MacOS, so you must have an Apple in order to develop the applications. It comes with a software emulator, so you don't necessarily need to have an actual iPhone.
You do not technically have to have an iPhone to write an iPhone program, you do, however have to (if you go through normal, non hackintosh channels) have an Intel-based Mac, and testing your app on the device is 100, if not 1000 times more useful than testing in the simulator.
Go to Apple's Developer Site to sign up as a developer (free, until you want to test on a device, see above) and download Xcode. This will include the iPhone SDK and the iPhone simulator.
You do not need an iPhone to develop an iPhone app. You can also use an iPod Touch. If you don't want to buy either device, the iPhone SDK comes with an iPhone simulator that you can use to test your apps. However, the simulator has a number of limitations, such as a lack of accelerometers.
Keep in mind that you also need a Macintosh computer with at least version 10.5 of Mac OS X.