Since folks were interested in my favorite tools, I thought I'd blog how I have PowerShell configured. I'm not an ultra-power user, but I hold my own and hopefully you can use some of this configuration for yourself. Please tell me you're not still using CMD.
First, I use a trick I picked up from Tomas Restrepo to change your home directory and profile script. Here's my Microsoft.PowerShell_profile.ps1 file (in the WindowsPowerShell subdirectory of My Documents)
By default, PS uses the user's personal directory (c:\users\hpierson in my case) as the home directory and the aforementioned filename for the profile script. Personally, I like to keep all "real" data off my boot partition so that I don't have to back it all up when I repave. So my "real" home location is d:\HPierson.Files. The above script sets both the $HOME variable and file system home property to this directory. It also resets the $PROFILE variable to a script in my $home\Scripts folder and runs it.
My $PROFILE script does several things of note:
I don't set vsvars in the $profile script, but I do have a copy of the one Chris Tavares wrote in my scripts folder, so I can set up a VS environment in a moments' notice.
Also, I put PowerShell on the Vista quick launch bar, so I can bring it up by typing Win-2.