OS: Debian - the big boy's Ubuntu...
seriously though, I've had several U/Ku/Xubuntu installations and they've all sucked with their buggy installs and "oh no you cant have root" crap - straight debian beats them hands down; get the minimal install and avoid the bloat of other "easy to use" distros.
App: Vim, the rewards of the learning curve are well worth it.
Still use win for graphics et al though - the linux apps just don't cut it for me (probably due to my Adobe/Macromedia brainwashing)
steharg: wasn't aware of xara fro 'nix, cheers for the tip.