Environment

[OKeez]

Eclipse with Lua editor addon. Has version control integrated for SVN, VCS, Mercurial, etc. Also, you get ANT build scripting for zipping up addons, copy to rift addon folder, etc. There's no IntelliSense for the Rift API yet and I don't expect one will be done before the full API is available...but it can be done.

Warning: Eclipse is a big install and probably overkill if you don't code in other languages...I do all my projects in Eclipse (Java, JS, C#, AS3, PHP,...)

[Grabnor]

I use Notepad++, with pseudo-intellisense.

Shameless plug:

Rift Lua autocomplete for Notepad++

[Sunspots]

I've actually gone over to IDEA with Lua plugin, with Rift API support...
Not sure if the Notepad++ handles functions with colons in a good manner (I don't want, for example, SetVisible() to come up all the time, unless it's after a colon (and even more preferably if it could learn that a variable contains a UI element, and even better if it knew what type))

[doxxx]

IDEA with Lua plugin. I use it all the time for Java stuff, so I'm used to it.

[BuGi]

Notepad++ with rift autocomplete